BB Holdings raises $50 million from notes, warrants; CombinatoRx to close $35 million direct offering

By Sheri Kasprzak

New York, Oct. 11 - BB Holdings Ltd. pocketed $50 million from the sale of unsecured notes and warrants, heading up a rather active day for PIPEs.

Meanwhile, in the broader market, a sell-sider noted that activity is picking up as the year starts to wind down.

"This is nothing new," he said. "Activity always picks up around this time of year.

"I would say that it's probably slower than it normally is this time of year just because the stock market has been rocky lately but I feel like by December, things will really be jumping here."

In other offerings, CombinatoRx, Inc. led a slate of biopharmaceutical deals, announcing its plans to wrap up a $35 million registered direct placement.

Gina Nugent, a spokeswoman for CombinatoRx, said in an interview Thursday that the company conducted the deal to quickly raise capital and to bring in longer-term investors.

"The reason why we went with a registered direct deal is to get it done very quickly and to get access to the amount of capital we needed," Nugent said.

"We were able to get it done basically overnight. We were able to make sure this stock was put in the hands of what we consider to be quality, long-term holder investors, as opposed to quick money."

The per-share price in the placement is a 6.5% discount to the company's Oct. 10 closing stock price.

In the same sector, Australian pharmaceutical company Pharmaxis Ltd. said Thursday that it pocketed A$50 million from an offering of shares.

BB Holdings raises $50 million

Looking back at the BB Holdings offering, the company issued series 2 fixed-rate unsecured notes due Nov. 2, 2014.

The investors in the deal, which included Michael Ashcroft, also received warrants for 11,094,442 shares, each exercisable at $6.50 through Aug. 2, 2014.

Proceeds will be used to further capitalize The Belize Bank (Turks and Caicos) Ltd., one if its subsidiaries.

BB Holdings is a financial services company based in Belize City, Belize.

After the offering was announced Thursday morning, BB Holdings' stock ended the day unmoved at $4.55 (Pink Sheets: BBHLF). In London, shares of BB Holdings were up £2 to end at 228p (London: BBHL).

CombinatoRx's $35 million deal

In the pharmaceutical sector, CombinatoRx said Thursday it will close a $35 million registered direct placement of stock next week.

CombinatoRx did the deal for more than they had initially planned to raise.

Nugent said in the Thursday interview that the company had initially planned to raise $25 million - and had been able to do that at market price.

"We immediately discovered there was a lot more interest out there, so we went for the full $35 million," Nugent said. "But we offered a 6% discount."

Nugent noted that she has noticed several biotech firms have conducted registered direct offerings lately and she feels it is because these companies can get the money quickly and can have some control over where the stock is going.

"You don't want to have it in the hands of fast money if you can avoid it," she noted.

For CombinatoRx in particular, the company has been in talks with potential partners.

"Our goal is to conduct some partnering discussions and it's really important that we have enough cash in the bank to conduct those discussions from a position of strength," Nugent added.

The company will sell 5.6 million shares to a group of institutional investors at $6.25 each, a 6.5% discount to the company's $6.69 closing stock price on Wednesday.

The shares will be sold under the company's shelf registration.

Lazard Capital Markets LLC is the placement agent for the deal.

CombinatoRx said it expects the offering to close on Oct. 16.

The company's stock ended the day down 47 cents, or 7.03%, at $6.22 (Nasdaq: CRXX).

Proceeds will be used for the development of the company's portfolio of clinical and pre-clinical stage product candidates, for the discovery of additional product candidates, capital expenses, working capital and general corporate purposes.

CombinatoRx is a Cambridge, Mass.-based pharmaceutical company focused on treatments for cancer, immuno-inflammatory disease, metabolic disease and neurodegenerative disease.

CombinatoRx conducted a $47.97 million private placement of its stock back in March 2006, selling 4.68 million shares at $10.25 each.

The shares were sold at a 7.6% discount to the company's $11.10 closing stock price on March 22, 2006.

Pharmaxis to pocket A$50 million

In other pharmaceutical news, Australian pharmaceutical company Pharmaxis said it will seal a A$50 million offering of stock next week and the news sent its stock down A$0.20 to end at A$4.08 (Australia: PXS).

Pharmaxis intends to sell 12.8 million shares at A$3.90 each, an 8.9% discount to the company's A$4.28 closing stock price on Oct. 8.

The deal is set to close Oct. 16.

Headquartered in Sydney, Australia, Pharmaxis is a drug development company.

Transcendent One closes convertible deal

In other news, Transcendent One, Inc. wrapped a $3 million offering of convertible debt units.

Transcendent One sold 600 units at $5,000 each. The 10% debentures are due Oct. 10, 2009 and are convertible into common shares at $0.06 each.

Each unit will automatically be converted into 3,000 shares on Oct. 10, 2009.

Transcendent may repay the notes on or before Aug. 31, 2009 at par plus interest.

Transcendent One, based in Solana Beach, Calif., offers payment-processing systems for merchants.

Cathay plans C$25 million

Moving to Canadian offerings, Cathay Forest Products Corp. announced a possible C$25 million placement of stock Thursday.

The pricing terms have not been set but the deal will be conducted through a syndicate of underwriters led by Canaccord Capital Corp. and CIBC World Markets Inc.

The syndicate will also include Jennings Capital Inc.

The stock responded positively, gaining 8 cents, or 5.33%, to close at C$1.58 (TSX Venture: CFZ).

Proceeds will be used for the acquisition of a 51% interest in a standing timber concession in Russia.

Cathay announced Wednesday that it plans to generate harvesting revenue in 2008 from its expansion plan. The timber company plans to complete three phases of acquisitions in Guizhou, China and develop a Russian concession. The company said it will require new funding to complete this plan.

Cathay is located in Richmond Hill, Ont.

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