Private placement volume remains weak; Liquor Stores Income Fund to raise C$30 million

By Sheri Kasprzak

Atlanta, Feb. 17 - As stocks took a tumble, private placement volume issuance trailed off Thursday.

"Not a lot to really talk about today," said one sell-side source. "There were a few big announcements, but as far as the volume of deals, it was kind of slow."

Some sources said lower stocks kept issuers out of the market Thursday, but some remained optimistic that more deals are coming.

"I just think it was a down day for PIPEs today," said one market source. "I think there are issuers who want to put deals out there, but today just wasn't the day."

The Dow Jones Industrial Average dipped 80.62 to close at 10,754.26; the Nasdaq composite index was down 26.09 to close at 2,061.34 and the S&P 500 lost 9.59 to end at 1,200.75.

Lower oil prices may have kept some Canadian issuers out of the market Thursday, one Canadian source said.

Oil prices dropped $0.80 to close at $47.53 per barrel.

"Energy companies may be staying out until oil can recover a bit," the source said. "Obviously, energy stocks get a boost from higher oil prices."

Leading private placement news was a C$30,012,000 offering from Liquor Stores Income Fund.

The company plans to sell 1.83 million trust units at C$16.40 each.

RBC Capital Markets Inc. is the placement agent.

The proceeds from the offering will be used to fund the acquisition of 13 new liquor stores in Alberta and the development of two stores in British Columbia. The remainder of the funds will be used to repay debts and for general corporate purposes.

"This private placement will position the fund with a strong balance sheet to continue our growth strategy," said the company's president and chief executive officer Irving Kipnes in a statement. "We have recently increased the amount available under our operating line from C$18 million to C$24 million and our acquisition line from C$10 million to C$20 million. The combination of the private placement and these larger facilities position the Fund for further growth."

Based in Edmonton, Alta., Liquor Stores Income Fund is a liquor store operator.

Liquor Store Income Fund's stock closed up C$0.42 at C$16.92 Thursday.

BioCryst plans $24 million deal

BioCryst Pharmaceuticals, Inc. has announced its intentions to raise $23,925,000 in a direct placement.

The company plans to sell 4.35 million shares at $5.50 each to nine institutional investors.

Leerink, Swann & Co. is the placement agent in the deal.

The shares are being sold through BioCryst's shelf registration.

"The market hasn't been responding well to this deal," said one market source. "I'm not familiar with the company, so I really can't tell you what may have caused the drop, but the deal doesn't look bad to me."

Right after the deal was announced, the company's stock dropped $0.26 to close at $5.72.

Based in Birmingham, Ala., BioCryst designs, optimizes and develops drugs to block enzymes in cancer, cardiovascular diseases, autoimmune diseases and viral infections.

Fronteer closes offering

Fronteer Development Group Inc. wrapped a C$12,722,500 private placement with a greenshoe Thursday.

The company sold 7.27 million units at C$1.75 each. The greenshoe allowed for an additional 1.27 million units.

The units are comprised of one share and one half-share warrant. The whole warrants allow for an additional share at C$2.75 each through Feb. 17, 2007.

"It was a good deal for them," said one Canadian sell-side source. "Looks like the greenshoe was increased to keep up with demand, so that's always a good sign."

Pacific International Securities Inc. was the placement agent.

Based in Vancouver, B.C., Fronteer is a mineral exploration company. The proceeds from the private placement will be used for exploration on its mineral properties in Canada and Turkey.

On Thursday, Fronteer's stock closed down C$0.05 at C$1.70.

Input/Output suffers losses

A day after closing a $30 million private placement and announcing earnings, Input/Output, Inc.'s stock took a hit.

On Thursday, the company's stock closed down $0.41 at $6.55. On Wednesday, after the closing was announced, the company's stock gained $0.0.5 to close at $6.96.

The company sold convertible preferred stock with a conversion price of $7.869 each.

Based in Houston, Input/Output provides seismic services.

Input/Output's stock ended the day up $0.05 at $6.96 Wednesday.

Linear Gold makes gains

Linear Gold Corp. saw gains in its stock Thursday, a day after wrapping up a C$25 million private placement.

The company's stock gained C$0.05 to close at C$7.84. On Wednesday, after the deal closed, the company's stock lost C$0.01 to end at C$7.79.

The company sold units at C$7.75 each.

Linear, based in Halifax, N.S., is a gold exploration and acquisition company.

PolyMet closes up

PolyMet Mining Corp.'s stock ended Thursday higher after pricing a C$4.95 million private placement earlier this week.

On Thursday, the company's stock closed up C$0.04 at C$0.59, after closing C$0.05 lower at C$0.55 on Wednesday. On Tuesday, after the deal was announced, the company's stock dropped C$0.01 to end at C$0.60.

The offering includes units sold at C$0.55 each.

Based in Vancouver, B.C., PolyMet is a metals production company.

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