Jefferies stock up 7.8% after $125 million PIPE; Cytokinetics to close $33 million direct offering

By Sheri Kasprzak

New York, Jan. 18 - Jefferies Group, Inc.'s stock gained more than 7.8% after the investment bank announced a $125 million private placement of series A convertible preferred stock.

Word of the offering along with release of the company's fourth quarter earnings sent Jefferies' stock up in the early afternoon. The gains continued with the stock settling up $3.77, or 7.83%, to end at $51.92 (NYSE: JEF).

In addition to the preferred sale, Jefferies reported earnings rose 32% to $46.7 million in the fourth quarter.

The 3.25% preferreds, which will be purchased by Massachusetts Mutual Life Insurance Co., are convertible into common shares at $62.00 each.

The two companies have also agreed to double their equity commitments to Jefferies Babson Finance LLC, the joint-venture company the two formed in October 2004. Jefferies and MassMutual will each invest $125 million into Jefferies Babson.

"We are extremely pleased to expand our strategic and operating relationship with Jefferies," said Roger Crandall, MassMutual's chief investment officer, in a statement. "We are impressed with the middle-market franchise Jefferies has developed and believe our significant investment and association with Jefferies will be of great benefit to our policyholders."

"I have worked with the individuals at MassMutual and Babson Capital for over 18 years," said Richard Handler, Jefferies' chairman and chief executive officer, in a statement. "We are particularly pleased that this world-class organization has agreed to become significant, long-term shareholders and partners of Jefferies. The further development of Jefferies Babson Finance will allow us to better serve our expanding client base of growing and mid-sized companies and financial sponsors."

New York City-based Jefferies Group is an investment bank.

Looking to the biotech sector, Cytokinetics, Inc. is gearing up to settle a $33 million direct placement of stock.

The company has secured agreements from Federated Kaufmann, Red Abbey Venture Partners and other institutional investors for 5 million shares at $6.60 each.

The shares are being sold under the company's shelf registration.

The company intends to issue the shares on Jan. 23.

The offering was announced Wednesday afternoon, and the company's stock edged up 2.67%, or $0.184, to settle at $7.074 (Nasdaq: CYTK).

Based in South San Francisco, Calif., Cytokinetics is a biopharmaceutical company focused on the development of novel small-molecule drugs that target the cytoskeleton.

Crystallex to raise $31.32 million

Moving to the natural resources field, Crystallex International Corp. priced a $31,317,100 unit offering.

The non-brokered deal includes 10,799,000 units at $2.90 each. Those units are comprised of one share and one warrant for 1.512 shares. Each whole warrant is exercisable at $4.50 each for 18 months.

Proceeds will be used for the development of the Las Cristinas project, the repayment of existing debt and for general corporate purposes.

The company's stock gained 16 cents, or 6.06%, to close Wednesday at $2.80 (AMEX: KRY).

The offering is slated to close on Jan. 25.

Crystallex, based in Toronto, is a gold exploration company.

Norsemont stock up after deal upsized

Norsemont Mining Inc.'s stock closed up Wednesday after the company increased to C$16 million and changed some of the terms of a previously announced non-brokered private placement.

The company's stock gained 5 cents to close at C$4.30 (TSX Venture: NOM) on Wednesday after the pricing details of a previously announced C$10,012,500 private placement were changed.

Norsemont now plans to sell 4 million units at C$4.00 each, including 500,000 units that will be sold to insiders. The units are comprised of one share and one half-share warrant. The whole warrants are exercisable at C$4.75 each for two years. The Sentient Group has subscribed for the remaining 3.5 million units.

Proceeds will be used for work programs on the Constancia and Amata projects. The rest will be used for the investigation of asset acquisition activities and for working capital.

The deal priced on Dec. 19, 2005 for up to 2,225,000 units at C$4.50 each. Those units were comprised of one share and one warrant. The warrants had a strike price of C$5.00 and an expiry of two years.

"We're delighted that a quality investor such as The Sentient Group has recognized the value of our asset at Contancia," said Marc Levy, the company's CEO, in a statement. "Sentient is an exceptional group for us to partner with and they are determined to see our Contancia project move toward production.

"This is a considerable milestone for Norsemont to have achieved in less than 12 months since optioning the Contancia property from Rio Tinto [plc]. We are proud to attract such an outstanding financial partner to help in developing a first-class project such as Constancia.

"The Sentient Group has a long-term approach to investing, is actively involved and able to provide strategic and long-term planning advice. Their extensive experience in mining will provide Norsemont with additional resources to ensure our success."

Vancouver, B.C.-based Norsemont is a mineral exploration company.

Lanesborough prices C$15 million deal

Perennial private placement issuer Lanesborough Real Estate Investment Trust announced its plans to raise up to C$15 million and at least C$5 million in an offering of series F convertible debentures.

The 7.5% debentures mature in five years and are convertible into trust units at C$6.00 each for the third year after closing, at C$6.60 each in the fourth year and at C$7.30 each in the fifth year. The debentures are not convertible for the first two years.

Wellington West Capital Inc. and Desjardins Securities Inc. are the placement agents.

Proceeds will be used for equity commitments associated with the purchase of multi-family apartment properties. The rest will be used for general corporate purposes.

News of the offering Wednesday afternoon sent the company's stock down, with it losing C$0.40, or 7.27%, to close at C$5.10 (TSX Venture: LRT).

Based in Winnipeg, Man., Lanesborough is a real estate investment trust focused on residential real estate.

Aksys stock slips

A day after announcing it has received a $20 million equity line, Aksys, Ltd.'s stock ended the day off Wednesday.

The company's stock dropped 5.71%, or 4 cents, to end at $0.66 (Nasdaq: AKSY).

On Tuesday, when the equity line agreement was announced, the company's stock took off, gaining 24.78%, or 14 cents, to close at $0.70.

The investor, under the terms of the equity line, agreed to buy shares of Aksys over 25 months - providing the company's stock price exceeds $0.10.

Based in Lincolnshire, Ill., Aksys produces hemodialysis products for patients suffering from kidney failure.

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