Energy Transfer seals $213.5 million PIPE; TrueStar Petroleum prices C$3.97 million units

By Sheri Kasprzak

New York, Nov. 28 - Energy-related offerings topped private placement news Tuesday as oil prices climbed for the second straight session.

In the broader market, stocks may have rebounded, but PIPE volume took a hit from substantial stock losses on Monday and from losses early in the session Tuesday.

"It's just an off day," said one New York-based market source. "I don't see it as a trend or any sort of long-term problem."

The Dow Jones Industrial Average rebounded somewhat, gaining 14.74 to close at 12,136.45, and the Nasdaq composite index climbed 6.69 to end at 2,412.61. The Standard & Poor's 500 composite index edged up 4.82 to close the day at 1,386.72.

In the energy sector, oil prices gained 67 cents to end the session at $60.99 per barrel after climbing $1.08 to end at $60.32 per barrel on Monday.

Energy Transfer's deal

Related to energy offerings, Energy Transfer Equity, LP pocketed $213,500,135 from an offering of limited partnership units.

A group of institutional investors purchased 7,789,133 units at $27.41 each, a 6% discount to the company's $29.15 closing stock price on Monday.

Proceeds will be used to repay debt under the company's current credit facility.

The company's stock gained 0.07%, or 4 cents, to close at $53.60 Tuesday (NYSE: ETP). The volume of Energy Transfer shares traded was elevated slightly with 322,200 shares traded. On average, there are 175,044 shares traded.

"This private sale of equity shows once again the strong interest in ETE by institutional investors," said John McReynolds, the company's chief financial officer, in a news release. "We have, as one of our foremost priorities, a conservative and strong balance sheet. We are pleased with the performance of Energy Transfer Partners, LP and its impressive growth.

"The continuing increases in cash distributions at ETP, which in turn lead to increased cash distributions at ETE, have grown each quarter. As a result of ETP's success, ETE's annual distribution level has increased by nearly 80% since its initial public offering in February of this year."

McReynolds did not immediately return calls seeking additional comment on the offering Tuesday.

Energy Transfer Equity owns and operates Energy Transfer Partners, LP, which owns and operates a portfolio of energy assets, and CCE Holdings, LLC, which operates interstate pipelines.

Earlier this month, subsidiary Energy Transfer Partners wrapped a $1.2 billion private placement of its class G trust units, selling 26.1 million units at $46.00 each, a 6% discount to the company's $48.94 closing stock price on Oct. 31.

TrueStar's C$3.9 million deal

Elsewhere in the energy sector, TrueStar Petroleum Corp. negotiated a C$3,971,100 private placement of units Tuesday that dropped the company's stock by more than 13% on the day.

The stock slipped 3 cents to end at C$0.20 (TSX Venture: TPC).

The offering includes 19,855,500 units at C$0.20 each.

The units are comprised of one share and one warrant. The warrants are exercisable at C$0.35 each for two years.

Proceeds will be used for development of the company's Guatemalan assets and for general corporate purposes and working capital.

Based in Vancouver, B.C., TrueStar is an oil and natural gas exploration, development and production company.

Sheffield stock drops on Pipex deals

Over in the biotech sector, Sheffield Pharmaceuticals, Inc. watched its stock sink by 14.77% after its subsidiary Pipex Pharmaceuticals, Inc. wrapped up two private placements for $13.7 million.

The stock dropped 26 cents to close at $1.50 (OTCBB: SFPH).

In the first financing, the company sold 45 units at $100,000 each. Each unit included 45,702 shares and warrants for 22,851 shares.

The warrants are exercisable at $1.10 each.

In the second offering, the company sold about 13.7 million shares for proceeds of $9.2 million. The exact price per share could not be determined by press time Tuesday.

The investors include Ridgeback Capital, Perceptive Life Sciences Fund, Firebird Capital, William Harris Investors, Chestnut Ridge Partners, AFA Private Equity of Michigan, SDS Capital, Gemini Strategies and Whalehaven Capital.

Accredited Equities Inc. was the placement agent for both deals.

Based in Ann Arbor, Mich., Pipex develops drug candidates for neurological and fibrotic diseases.

Akesis stock falls 5%

In secondary market activity in the biotech sector, Akesis Pharmaceuticals, Inc. watched its stock give up 5.26% on Tuesday after settling a $3.51 million stock offering.

The company's stock lost 5 cents to settle at $0.90 (OTCBB: AKES). On Monday, when the deal closed, the stock remained unchanged at $0.95.

The shares in the placement were sold at $0.60 apiece to accredited investors, including Avalon Ventures VII, LP.

Proceeds will be used to start clinical development of AKP-101, the company's product to lower blood glucose levels used in combination with metformin in type 2 diabetes.

San Diego-based Akesis develops treatments for diabetes and metabolic disorders.

BioMS stock climbs

A day after announcing a C$20,899,743 private placement, BioMS Medical Corp.'s stock made a comeback.

The stock gained 8 cents, or 2.37%, to end at C$3.45 (Toronto: MS). The stock gave up 5 cents, or 1.46%, to close at C$3.37 Monday when the deal was announced.

The company issued units of one share and one half-share warrant at C$3.41 each and plans to sell additional units for another C$3,000,800 in proceeds in the coming weeks.

Versant Partners Inc. and Rodman & Renshaw, LLC were the bookrunners.

Proceeds will be used for ongoing research and development as well as for general corporate purposes.

BioMS, based in Edmonton, Alta., develops and commercializes novel therapies for multiple sclerosis. Its lead technology, MBP8298, for MS is in phase 2/ 3 clinical trials in Canada and Europe.

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