Crosstex Energy will seal $360 million PIPE; Hana Biosciences prices $40 million direct placement

By Sheri Kasprzak

New York, May 17 - Despite a dip in oil prices, Crosstex Energy, LP is preparing to conclude one of the largest PIPE offerings this year - for $360 million.

Meanwhile, in the broader market, stocks plummeted and PIPE volume continued to sag.

"Stocks are taking a beating, so [issuers] are taking a step back," said one sellside market source on Wednesday. "There are plenty of things out there waiting to price, but not today."

As oil prices dropped 84 cents on the day to close at $68.69 per barrel, the Dow Jones Industrial Average took a sharp hit, losing 214.28 to close the session at 11,205.61.

The Nasdaq composite index gave up 33.33 to close at 2,195.08 and the Standard & Poor's 500 composite index fell 21.76 to end at 1,270.32.

In the Crosstex Energy, LP offering, the company secured agreements for a $360 million offering of series C senior subordinated units.

The company plans to sell 12,829,650 of the series C subordinated units to a group of investors including Crosstex Energy, Inc., which owns 2% general partner interest and a 38% limited partner interest in Crosstex Energy, LP. Crosstex Energy, Inc. intends to buy $180 million of the offering.

The units are being sold at $28.06 each, a 21.7% discount to the company's $35.85 closing stock price on May 16.

The subordinated units automatically convert into common units on Feb. 16, 2008 and, until then, will not participate in cash distributions of the partnership.

"The issuance of these senior subordinated units is a very positive indication of confidence in Crosstex's long-term plan for growth," said Barry E. Davis, Crosstex Energy, LP's president and chief executive officer, in a news release. "Additionally, it puts the partnership in an excellent position to fund its previously announced growth programs. We are excited by the strong financial support we have received from the investment community."

The stock ended the day down 3.46%, or $1.24, to end at $34.61 (Nasdaq: XTEX).

The proceeds from the financing will be used to acquire the natural gas-gathering pipeline systems and related facilities from Chief Holdings LLC.

The placement will close when the acquisition is closed.

To fund its $180 million investment in the Crosstex Energy , LP placement, Crosstex Energy, Inc. wrapped a $179,143,616 private placement with Chieftain Capital Management, Inc.; Kayne Anderson MLP Investment Co.; Kayne Anderson Energy Total Return Fund, Inc.; LB I Group Inc., an affiliate of Lehman Brothers Inc.; Lubar Equity Fund, LLC; and Tortoise North American Energy Corp.

Of the 2,550,260 shares issued, 2,521,750 shares were sold at $70.17 each and the 28,510 shares purchased by Lubar were sold at $76.90 each.

On Wednesday, Crosstex Energy, Inc.'s stock lost 2.21%, or $1.79, to settle at $79.24 (Nasdaq: XTXI).

The proceeds will be used to finance the company's $180 million investment in Crosstex Energy, LP.

Looking to Crosstex Energy, LP's earnings statement released May 9, the company's net income for the quarter ended March 31 slipped to $2.92 million from net income of $3.18 million for the same period ended March 31, 2005.

Crosstex Energy, Inc.'s net income increased on the year, however. The company reported a net income of $12.83 million for the quarter ended March 31, up from net income of $1.57 million for the same quarter of 2005.

Dallas-based Crosstex Energy, LP is a midstream natural gas company. Crosstex Energy, Inc., also based in Dallas, processes and refines natural gas.

Hana's $40 million direct deal

Moving to the biotech sector, Hana Biosciences, Inc.'s stock dropped more than 9.5% after the company announced the pending completion of a $40,000,162 direct placement of stock.

Hana has agreed to sell 4,629,500 shares at $8.50 each to a group of institutional investors and 71,600 shares at $9.07 each to executive officers and a director.

The shares are being sold under Hana's shelf registration.

The company's stock gave up 9.59%, or 87 cents, on the day to close at $8.20 (Nasdaq: HNAB).

Lehman Brothers Inc. is the bookrunner with Jefferies & Co. and Oppenheimer & Co. Inc. as co-agents.

The placement is scheduled to close May 19.

San Francisco-based Hana is a biopharmaceutical company focused on developing treatments for cancer.

ProEx raises C$48.45 million

In the Canadian energy sector, ProEx Energy Ltd. pocketed C$48.45 million from a private placement of 3 million shares at C$16.15 each.

The deal was placed through a syndicate of agents led by FirstEnergy Capital Corp.

Proceeds from the offering will be used for exploration in the second half of 2006 and into 2007.

The closing was announced early Wednesday afternoon, with the stock ending down 59 cents, or 4.17%, to close at C$13.55 (Toronto: PXE).

ProEx is located in Calgary, Alta.

Elsewhere, ExAlta Energy Inc. priced a C$11.9 million offering of flow-through shares at C$7.00 each, a 27.3% premium to the company's C$5.50 closing stock price on May 16.

The offering includes up to 1.7 million shares and is expected to close June 6.

The deal is being placed through a syndicate of underwriters led by FirstEnergy Capital Corp.

On Wednesday, ExAlta's stock lost 15 cents, or 2.73%, to settle at C$5.35 (Toronto: EXA).

Proceeds will be used to fund exploration on ExAlta's Canadian properties.

In other news, ExAlta announced that its 2006 capital budget was increased to C$64 million from C$55 million.

ExAlta is also based in Calgary.

Accentia stock edges up

A day after announcing an $8,235,000 private placement of stock, Accentia Biopharmaceuticals, Inc.'s stock ended the day up slightly.

The company's stock improved by 2 cents, or 0.35%, to close at $5.69 (Nasdaq: ABPI).

On Tuesday, the stock dropped $1.00, or 15%, to close at $5.67.

Accentia has agreed to sell shares at $5.00 each to a group of institutional investors. The price per share is a 25% discount to the company's $6.67 closing stock price on May 15.

Tampa, Fla.-based Accentia is a biopharmaceutical company focused on developing products to treat cancer and respiratory diseases.

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