Private placement volume strengthens on better oil prices; Inhibitex closes $50 million deal

By Sheri Kasprzak

Atlanta, Nov. 10 - As oil prices improved Wednesday, the private placement market benefited with better volume, sell-side sources said.

"Oil affects the stock price, which affects the price that the deal gets done at," said one source. "To the extent that management of the issuer believes their stock is undervalued, they wish to wait. Therefore, you may say that oil prices are affecting the market."

Oil gained $1.49 Wednesday to close at $48.86 per barrel.

In private placement action north of the border, six Canadian companies either closed or issued private placements Wednesday.

According to one sell-side source, Canadian deals can pull in a broad range of investors if they like the terms.

"Lots of buyers will put small amounts of money into this for the right price," said the source.

Private placement action in the United States was led by Inhibitex Inc., which completed its previously announced $50 million and disclosed detailed terms.

The Alpharetta, Ga.-based biopharmaceutical company sold 6,777,370 shares at $7.3775 and warrants for 2,033,211 shares at $8.81 to New Enterprise Associates 10 LP, William Blair Capital Partners, Essex Woodlands Health Ventures V LP and Alliance Technology Ventures III LP.

Lazard LLC acted as placement agent in the deal.

"It looks like a pretty good deal to me," said one sell-side source familiar with the deal. "It priced pretty much in line with the market."

Management from Inhibitex did not return calls for comment on the deal by press time Wednesday.

Inhibitex plans to use the proceeds from the financing for the development of its Veronate and Aurexis clinical programs, for its pre-clinical research programs and for general corporate purposes.

Inhibitex's stock closed up $0.30 at $7.37 Wednesday.

BroadVision to get $20 million

Web applications provider BroadVision Inc. has entered into an agreement for the private placement of up to $20 million of convertible debentures.

The company will issue $16 million of the debentures to five institutional investors. The agreement also allows for the placement of an additional $4 million at the investor's option.

The three-year debentures are convertible into common shares at $2.76 or a 15% premium.

The investors will receive warrants for 1.7 million shares at $3.58 for five years, exercisable starting six months after the deal closes. The deal, which priced late Tuesday, is expected to close at the end of this week.

According to a sell-sider familiar with the deal, it was priced in line with the market.

"It might be at a very slight discount," said the source.

Thomas Weisel Partners LLC acted as lead placement agent.

Based in Redwood City, Calif., BroadVision's stock closed down $0.05 at $2.39 Wednesday. On Tuesday, its stock closed at $2.44.

ILX deal seen priced at discount

Meanwhile the $3.7 million private placement announced late Tuesday by ILX Resorts Inc. was priced at a significant discount to the market, according to one sell-side source.

"I have seen the deal and it does look like it's priced very low," said the source. "It priced at $9 and that is a really big discount if you look at where they've been trading.

"You can even tell by their stock price today that it was just underpriced."

ILX's chief financial officer Margaret Eardley did not return phone calls Wednesday for comment on the pricing.

The company announced late Tuesday that it would sell 415,778 shares at $9 per share in a deal led by JMP Securities LLC.

Its stock closed at $15.90 on Tuesday but in trading Wednesday, ILX's stock dropped $4.89 to close at $11.01.

Tiger Telematics wraps $10.5 million deal

Tiger Telematics Inc. has finished its $10.5 million private placement.

On Nov. 3, the company sold 1,618,000 shares at $6.48 per share.

Tiger Telematics, based in Jacksonville, Fla., designs, develops and markets mobile telematic systems. It plans to use the majority of the funds raised in the private placement to buy game content for its Gizmondo Europe Ltd. multi-entertainment device. It also plans to use the funds for future increased marketing expenses.

On Wednesday, Tiger Telematics' stock soared $0.60 at $12.15.

Nestor closes $6 million notes deal

Nestor Inc. has completed the sale of $6 million in 5% senior convertible notes.

The notes, due Oct. 31, 2007, are convertible into common shares at $5.82 per share.

Nestor is a Providence, R.I.-based traffic monitoring systems and services company. On Wednesday, its stock closed up $0.50 at $5.40.

Infinity to get $5.2 million

Oil and gas exploration company Infinity Inc. has received agreements for its $5.2 million private placement offering.

The deal consists of 1,027,000 shares at $5.10 sold to institutional investors.

C.K. Cooper & Co. acted as lead placement agent in the deal.

Based in Denver and Chanute, Kan., Infinity plans to use the proceeds from the deal for the exploration and development of its oil and gas properties. The funds will also be used for the repayment of debt and for general corporate purposes.

Infinity's stock plummeted $0.621, or 10.53%, Wednesday to close at $5.279.

Generex to get $4 million for notes

Generex Biotechnology Corp. said Wednesday it has received agreements for $4 million of its 6% secured convertible debentures.

Four accredited investors will buy the 15-month debentures, which are convertible into common shares any time after closing at $0.82.

Toronto-based Generex is a drug research and development company. It plans to use the proceeds from the financing to accelerate clinical development activities and for working capital and general corporate purposes.

Generex's stock closed down $0.03 at $0.72 Wednesday.

IA Global Inc. raises $1.13 million

IA Global Inc. received $1.13 million in a private placement.

PBAA Fund Ltd., Inter Asset Japan Co. Ltd. and a business partner of chief executive officer Alan Margerison bought 4,448,820 shares at $0.254.

The Burlingame, Calif.-based IA Global is a holding company for American and Japanese entertainment, media and technology companies. It plans to use the proceeds from the financing to develop its Rex Tokyo business and for general corporate purposes.

On Wednesday, the company's stock closed up $0.02 at $0.23.

Hip leads Canadian deals

In the largest Canadian deal of the day, Hip Interactive Corp. wrapped up a C$16 million private placement.

The company sold 14,814,815 shares at C$1.08 per share to Crescendo Partners II LP.

In conjunction with the deal, Crescendo's president and chief executive officer Eric Rosenfeld was appointed to Hip's board of directors.

"We are delighted to have completed this financing with Crescendo Partners LP and equally delighted to have Eric Rosenfeld appointed to our board," said Hip president and chief executive officer Arindra Singh in a statement. "He has played a key role creating shareholder value in many companies in which he has invested. We believe this financing gives us the resources to pursue effectively the corporation's significant growth opportunities."

TD Securities Inc. acted as financial advisor in the offering.

Hip Interactive is a Toronto-based electronic entertainment provider. The company plans to use the proceeds from the private placement to enhance its balance sheet and fund investments in the company's Hip Games and Hip Gear businesses.

SouthernEra plans C$5 million deal

In other Canadian action, SouthernEra Diamonds Inc. said late Tuesday it will raise C$5 million in a brokered private placement.

The offering will include up to 5,882,353 flow-through common shares at C$0.85.

Canaccord Capital Corp. will act as lead placement agent in the deal.

SouthernEra is a Toronto-based diamond-mining company. It plans to use the proceeds from the private placement for the exploration and development of its Canadian resource properties.

On Wednesday, SouthernEra's stock closed down C$0.01 at C$0.73.

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