Pico Holdings closes $22.63 million offering; meager stock gains hold back volume

By Sheri Kasprzak

Atlanta, May 6 - Pico Holdings, Inc. led private placement news to close the week with word that it completed a private placement of stock for $22,625,000.

The company sold 905,000 shares at $25 each to institutional investors in a deal placed through agent Merriman Curhan Ford & Co.

The company's stock dropped $0.65 to close at $25.10, but gained a penny in after-hours trading.

"We are very excited to attract high-quality institutional investors as a result of this financing," said the company's president and chief executive officer John Hart in a statement. "This transaction provides the company with additional capital to continue investing in strategic water assets and undervalued equities."

Based in La Jolla, Calif., Pico is a holding company for a water-resource development company and a private landowner in Nevada.

Elsewhere in the private placement market, sell-siders said the slight gains in stocks kept volume at a minimum Friday.

"It's a few things," said one sell-sider of lackluster volume. "It's the end of the week and generally things slow down near the week's end. And stocks were down yesterday and really didn't make up that much today, so the combination of those two factors is really keeping issuers away."

The major stock indexes barely budged Friday. The Dow Jones Industrial Average ended up 5.02 to close at 10,345.40; the Nasdaq composite index gained 5.55 to end at 1,967.35 and the S&P 500 edged down 0.75 to close at 1,171.35.

One sell-sider in Canada said he felt energy companies may jump back into the market early next week given gains in oil prices over the past three days.

"Energy companies' stocks are finally catching up to the gains in oil and that could mean more issuers in that sector," said the market source. "We'll have to wait and see, but it's entirely possible. That will definitely push volume here [in Canada]."

Over the past week, Canadian issuance has suffered somewhat, sources there have said, due to instability in oil prices.

For the third day in a row, oil prices went up, this time gaining $0.13 to close at $50.96 per barrel.

Big Sky's $17.5 million offering

In the energy sector, Big Sky Energy Corp. finished a $17.5 million private placement, the company said Friday.

The company sold a convertible debenture to Sun Drilling LLP as part of a drilling contract with Sun Drilling's subsidiaries KoZhaN LLP and Vector Energy West LLP.

The debenture bears interest at Libor plus 400 basis points and matures in one year. The debenture is convertible into common shares at a price not to exceed $2 each.

"We are very pleased to have Sun Drilling, a preeminent drilling contractor, join us as a stakeholder in our 2005 drilling plans," said Big Sky's president Al Sehsuvaroglu in a statement. "We believe this relationship will provide for a timely and cost-effective execution of what is a rather entailed drilling program. As well, we believe the staged nature of this convertible debenture is an innovative and accretive solution to alternative forms of financing at this stage of evolution of our company."

Big Sky is a Calgary, Alta.-based oil and gas exploration company. The company's stock closed unchanged at $1.19 Friday.

Fortress arranges C$2.4 million deal

Fortress Minerals Corp. said it plans to raise up to C$2.4 million in a non-brokered private placement.

The offering includes up to 4 million shares at C$0.60 each.

The deal was priced at a 9% discount to the company's closing stock price of C$0.66 on May 5.

"Not that bad," said one market source familiar with the natural resources sector. "Resource stocks have been reasonably strong for most of the week, so I'd say pricing on this one is pretty good."

Based in Vancouver, B.C., Fortress is a mineral exploration company. It plans to use the proceeds for its exploration programs in Russia and Mongolia and for general corporate purposes.

Fortress's stock lost a penny to close at C$0.65 Friday.

IWG closes $1 million offering

International Water-Guard Industries Inc. completed a private placement of stock for $1,005,760.

The company sold 12,572,000 shares at $0.08 each.

The deal was downsized from its original $1.2 million offering announced March 23.

"This completion provides a very positive base for our development plans," said the company's president and chief executive officer, David Fox, in a statement. "In immediate terms, it finalizes the clean-up of our balance sheet, but of more strategic importance, it will help us capture some very real opportunities in both the business aviation market and in the emerging airline market for our products."

Based in Burnaby, B.C., International Water-Guard is an aerospace company focused on aircraft potable water treatment. The offering is part of the company's restructuring plan and will be used to pay down debt. The remainder will be used for marketing and engineering activities and working capital.

The company's stock remained unchanged Friday at C$0.05.

Opti Canada's stock up

Opti Canada Inc.'s stock continued to rise Friday, a day after the company announced the closing of a C$36 million private placement.

The company's stock closed up C$0.40 at C$25.15 after gaining C$0.05 to close at C$24.75 on Thursday.

Opti Canada sold units of one share of series C preferred stock and one half-share warrant at C$30 each.

One market source who has been following the deal said the good premium the units were sold at helped push Opti Canada's stock.

"I'd say that it helped them," said the source.

Based in Calgary, Alta., Opti develops oil sands projects in Canada.

MobilePro's stock climbs

A day after wrapping the private placement of a convertible note for $15.5 million, MobilePro Corp.'s stock made gains.

The company's stock was up $0.022, or 8.43%, to close at $0.283 Friday.

On Thursday, when the closing was first announced, the company's stock slipped $0.013 to close at $0.261.

The note is convertible into common shares at $0.30 each.

Based in Bethesda, Md., MobilePro is a wireless technology and broadband telecommunications company.

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