British Airways (LSE: BA) lost ₤375 million ($595 million) in the 12 months ending March 31, 2009. This is down from a profit of ₤712 million ($1.1 billion) the year before. The airline, which was privatized in 1987, has never sustained a loss this great. As a result, British Airways will not pay any dividends to shareholders -- or bonuses to the management team.

Weaker demand and spikes in fuel costs are cited as the reasons for the year-over-year record loss. Revenue was up 2.9% (₤8.99 billion) year-over-year, but this was not enough to offset a 45% increase in fuel costs -- to ₤2.97 billion. Demand problems struck in the fourth quarter, with revenue dropping 8.4% to ₤1.9 billion.

Its previous record loss was ₤200 million for the year ending in 2002.

MOST NOTEWORTHY: Nova BioSource, Aventine Renewable and the REIT Sector were today's noteworthy initiations:

• ThinkPanmure believes Nova BioSource's (AMEX:NBF) biodiesal production process is economically superior to traditional processes but higher feedstock costs will make scaling difficult. Shares were initiated with an Accumulate rating.
  
• ThinkPanmure also initiated Aventine Renewable (NYSE:AVR) with an Accumulate rating and $8 target. The firm does not expect share upside until margin visibility improves, which will not occur until next year's corn crop materializes in early 2009.
  
• Lehman initiated the REIT sector with a Neutral rating; the firm started AMB Property (NYSE:AMB) and Kimco Realty (NYSE:KIM) with Overweight ratings and CBL & Associates (CBL) with an Underweight rating.

OTHER INITIATIONS:

• JP Morgan initiated BLADEX (NYSE:BLX) and Banco Santander (NYSE:SAN) with Overweight ratings.
• KeyBanc assumed Capital Lease Funding (NYSE:LSE) with a Hold rating.

MAJOR PAPERS:

• Chrysler LLC is discussing shuttering or selling Mopar, its auto parts unit, and Chrysler Transport, the overseer of supplies to Chrysler's plants, reported the Wall Street Journal (subscription required).
• Tomorrow, troubled condo developer WCI Communities Inc (NYSE: WCI) is expected to vote Carl Icahn and two of his representatives to the company's board, reported the Wall Street Journal.
• Barron's Online's (subscription required) "Inside Scoop" column reported that Pep Boys (NYSE: PBY) director James Mitarotonda, a director since August 2006, purchased over $1.2M in stock through his equity fund Barington Companies Equity Partners on Aug. 23 and 24 according to SEC data.
• The sale of a 20% strategic stake in Semiconductor Manufacturing International Corporation (NYSE: SMI), China's biggest chipmaker, has stalled, as the company's board is reportedly undecided about how to proceed, reported the Financial Times (subscription required).

OTHER PAPERS:

• Nasdaq Stock Market Inc (NASDAQ: NDAQ) has agreed to seek the approval of London Stock Exchange CEO Clara Furse before it sells its minority stake in the British exchange to any single buyer, reported the Independent.

According to Bloomberg, the Nasdaq Stock Exchange (NASDAQ: NDAQ) is considering selling its 31% stake of the London Stock Exchange, effectively giving up on trying to acquire the company. This money would be used to sweeten the company's bid for Sweden's OMX and help Nasdaq's financial condition.

What kind of money will the Nasdaq be able to receive for the LSE? Recently, the LSE's market value on the London Stock Exchange was $5.2 billion. Assuming Nasdaq sells its 31% block for a 20% discount, the Nasdaq would stand to get nearly $1.3 billion for the stake. Unfortunately, Nasdaq paid $1.33 billion for this stake originally so, unless the Nasdaq can receive the full value of its stake (which is unlikely), it stands to lose money on the deal. According to the company, this sale should produce about 35 cents in EPS next year.

Nasdaq would use this money to buy back stock, retire debt, and increase its offer for the OMX. According to the Bloomberg article, about $1 billion of the proceeds will be used to improve the financial condition of the company (via share buybacks and retiring debt) -- a move that should improve EPS on two fronts.

MAJOR PAPERS:

• Mohamed Abdulmohsin Al Kharafi & Sons WLL, a Kuwaiti-based firm led by the Al Kharafi family, recently bought 1.25 million shares of Krispy Kreme Doughnuts Inc (NYSE: KKD) and now owns 7.37, or 11.4% of Krispy Kreme, according to Barron's Online's "Inside Scoop" section.
• The board of Dow Jones & Company Inc (NYSE: DJ) is taking over talks on the company's future, reported the Wall Street Journal, which added in a different article that Brad Greenspan, the former CEO of MySpace says he will seek a non-controlling stake in Dow Jones through a $60-per-share Dutch auction.
• The Wall Street Journal reported that the London Exchange is discussing a possible merger with Italian stock exchange operator Borsa Italiana.

OTHER PAPERS:

• The Telegraph reported that state-run Russian gas company Gazprom (OTC: OGZPY) wants to nix an Exxon Mobil Corporation (NYSE: XOM)-led project to supply Russian gas to China.
• The Telegraph also reported that Vodafone Group plc (NYSE:VOD) will have to pay about $900 million to avoid having its stake in Verizon Wireless reduced by 1%, as joint venture partner Verizon Communications Inc (NYSE: VZ) has the right to increase its share to 56% from 55% if Vodafone does not pay the additional money.

Blah...they're at it again. NASDAQ Stock Market Inc.'s protracted hostile takeover of the London Stock Exchange Plc continues, and the rhetoric is heating up. NASDAQ claimed that the LSE's board has rejected their efforts for communication: "Our chairman called the LSE chairman on the opening day of the bid and he said he would call us back. We are still waiting for that bid," according to a NASDAQ spokesman.

The market appears to have spoken about what it thinks will happen: LSE shares currently trade at 13.06 pounds, while the proposed takeover is at just 12.43. So it is widely anticipated that NASDAQ will either pay more or go away (most likely pay more): traders don't appear to be buying the 12.43 price.

It seems unlikely that NASDAQ will walk away, as they've said they will, claiming this bid to be their best offer. With American markets losing ground rapidly to the LSE (particularly its Alternative Investment Market, an exchange for smaller companies) in the battle for IPOs, they appear anxious to acquire their competitor: if you can't beat 'em, try a hostile takeover. Regardless of the outcome, the vitriol being spewed by both sides will make this an interesting battle to watch.

If it's November, it must be time for some mergers. Sometime back in late July, a bored investment banking VP, mad at being stuck in the office shepherding the summer associates while all the managing directors were at their houses in the Hamptons, came up with a plan. A pitch. A huge acquisition. A strategic merger! The summer associate, blinded by the glamor of writing something that would one day soon be on the desk of the CEO of Bank of America Corporation (NYSE:BAC), or Nasdaq Stock Market Inc. (NASDAQ:NDAQ), or Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), made it look fabulous. The synergies would be mind-blowing, the financial impact, in the billions.

When the managing director was wooed back from the Hamptons with the promise of a meeting with Ken Lewis at Bank of America, or the Blackstone Group's patrician Jonathan D. Gray, she realized this was a brilliant idea. And immediately saw the M&A fee, like hundreds of gallons of revenue pushing the millwheel of the group's bonus pool. The summer associate carried the dozen color copies of the pitchbook to some vastly inferior city and the CEO was convinced.

Come November, the summer associate is pouring back Yuenglings at business school, basking in the full-time job offer he received to return to the investment bank, and in the nick of time, right before the managing director checks out for the holiday season, the mergers have been launched. They're not all successful, but that's part of the fun: that bored vice president will be ever more busy and will naturally have to cancel his trip home to Maine for Thanksgiving launching a counter-offer. Here's a rundown of the successful and not-so-successful deals of the day: