First BanCorp to close $94.8 million stock deal; large offerings may be result of acquisitions surge

By Sheri Kasprzak

New York, Feb. 16 - First BanCorp led PIPE news to round out the week with a $94,812,500 stock deal. The deal is one of several exceptionally large placements and some sellsiders said they feel mergers and acquisitions could be playing a role.

"We're in the middle of M&A season," said one sellsider based on the West Coast. "A lot of these transactions require a certain amount of capital and this is a quick way to get it."

Another sellsider based in New York agreed.

"Most of what you're seeing is related in some way or another to an acquisition or other type of combination," he said.

In fact, the First BanCorp offering comes amid talks between the company and investor Scotiabank for a potential acquisition.

Scotibank has agreed to give First BanCorp notice of its plans to acquire First BanCorp during the 18 months after the placement closes. Also, First BanCorp has agreed to give notice to Scotiabank of any proposed acquisitions.

In the placement, Scotiabank agreed to buy 9.25 million shares at $10.25 each, a 5% premium to the volume-weighted average closing stock price over the 30 trading days ended Jan. 30.

The deal is set to close within the next 90 days.

UBS Investment Bank was the placement agent.

"This investment signals a vote of confidence in the financial strength of First BanCorp, in the value of the FirstBank franchise and in the professionalism and capability of our management team," said Luis Beauchamp, the company's chief executive officer, in a news release from Friday morning.

"Scotiabank is a premier global financial institution and Canada's most international bank, and we welcome them as an institutional shareholder joining other institutional investors who hold equity positions in First BanCorp."

The company's stock got off to a positive start, gaining 7.8%, or 83 cents, by 11 a.m. ET. (NYSE: FBP). Even so, the stock gained only a penny on the day to end at $14.61.

Based in San Juan, First BanCorp is a state-chartered commercial bank with operations in Puerto Rico, the Virgin Islands and Florida.

The First BanCorp deal comes after a $150.15 million stock placement announced Feb. 15 for Black Hills Corp., with proceeds going to debt reduction. Black Hills has just announced it will buy $940 million of assets from Great Plains Energy Inc.

Meanwhile on Feb. 14, Exco Resources, Inc. announced a private placement of $2 billion of convertible preferred stock to help fund the acquisition of oil and natural gas properties in the Vernon and Ansley fields in Louisiana from Anadarko Petroleum Corp. and to repay debt.

China Security raises $60 million

In another large offering, China Security & Surveillance Technology, Inc. wrapped up a $60 million offering of guaranteed unsecured convertible notes.

Citadel Equity Fund Ltd. bought the notes, due 2012 and convertible at $18.00 each. The coupon on the notes could not be determined by press time Friday.

On Friday, China Security's stock fell 27 cents, or 1.77%, to end at $14.98 (OTCBB: CSCT).

Located in Shenzhen, China, China Security provides security and surveillance products and services.

NutraCea secures $50 million

In yet another large offering from Friday, NutraCea said it has received agreements from institutional and accredited investors to wrap a $50 million offering of its stock.

The investors plan to buy 20 million shares and will receive warrants for 10 million shares. The warrants are exercisable at $3.25 each for five years.

Rodman & Renshaw, LLC is the placement agent.

"This financing will strengthen NutraCea's ability to expand its proprietary stabilization plants both domestically and in the international markets, allowing us to bring our technology into regions of the world where large-scale rice production can provide the raw materials to manufacture our core products," said Brad Edson, the company's CEO, in a statement.

"This opportunity for rapid growth positions us to make stabilized rice bran and rice bran derivatives accessible to global communities as a food ingredient, an economical solution for the reduction of malnutrition and for nutraceutical products that address a variety of health issues."

The company's stock gave up 5.48% on Friday, or 17 cents, to close at $2.93 (OTCBB: NTRZ).

Based in El Dorado Hills, Calif., NutraCea researches and produces stabilized rice bran and derivatives.

Ziopharm to close offering

Looking to the biotech sector, Ziopharm Oncology, Inc. announced the terms of a $30,879,995 private placement it hopes to close in the coming days.

The deal includes 5,910,047 units of one share and one warrant for two-tenths of a share at $5.225 each.

The whole warrants are exercisable at $5.75 each for five years.

A group of investors led by Essex Woodlands Health Ventures and PTV Sciences, and including ProQuest Investments, LBI Group Inc., Henderson Global Investors and two funds managed by Medical Strategy, plan to buy the shares on Feb. 22.

Oppenheimer & Co. was the bookrunner with Paramount BioCapital, Inc. and Griffin Securities, Inc. as the co-agents.

Proceeds will be used for ongoing clinical development of the company's three lead products, ZIO-101, ZIO-201 and ZIO-301, currently in phase 1 or 2 trials. The rest will be used for general corporate purposes.

The stock gained 25 cents, or 4.81%, to settle at $5.45 (Nasdaq: ZIOP).

New York-based Ziopharm develops treatments for cancer.

In other biotech news, Pluristem Life Systems, Inc. sealed an $8 million private placement of 640 million shares at $0.0125 each.

The investors received one warrant per share, exercisable at $0.025 each.

So far the company has received $1.25 million from the offering and will receive the remainder by March 15.

Pluristem's stock gained three-tenths of a cent on Friday to close at $0.0485 (OTCBB: PLRS).

Based in Haifa, Israel, Pluristem is a biotechnology company focused on stem cell research.

Millennium Cell raises $6 million

Over in the tech sector, Millennium Cell Inc. concluded a $6 million private placement of unsecured convertible debentures.

The 8.25% debentures are due in two years and are convertible into common shares at $1.42 each.

The investors also received warrants for a number of shares equal to 35% of the shares issuable upon conversion. The warrants are exercisable at $1.14 each for three years.

The investors in the offering include Portside Growth & Opportunity Fund; Mainfield Enterprises, Inc.; Gemini Investment Strategies, LLC; Iroquois Master Fund Ltd.; JCB Capital LP; JCB Capital Offshore, Ltd.; Solomon Strategic Holdings, Inc.; and The Tail Wind Fund Ltd.

Millennium Cell's stock gained 6 cents, or 5.5%, to settle Friday at $1.15, putting on another 2 cents in after-hours activity (Nasdaq: MCEL).

Located in Eatontown, N.J., Millennium Cell develops hydrogen-based fuel cells used in the military, medical, industrial and consumer markets.

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