Fremont plans $80 million preferred sale as part of restructuring; Pluristem settles oversubscribed deal

By Sheri Kasprzak

New York, May 22 - Fremont General Corp. led PIPE news on Tuesday with a planned $80 million offering of exchangeable preferred stock as part of a restructuring of the company. News of the transactions sent the company's stock zooming 40.65%.

The stock gained $2.89 on Tuesday to close the day at $10.00 (NYSE: FMT).

In the offering, the company intends to sell the preferreds to an investor group led by Gerald J. Ford. The preferreds are exchangeable for common shares at $8.44 each.

The investor group will also receive warrants for 7.1 million shares, exercisable for 15 months at $8.44 each.

Once the preferreds are exchanged, the investor group will own 20% of the company's then-outstanding common stock.

The offering is being conducted as part of the sale of the company's commercial real estate lending business, the sale of a minority interest in the company and the appointment of new senior management.

Following the private placement of the preferreds, Ford will become the company's chairman and will name two executives to senior positions within the company.

iStar Financial Inc. will purchase the company's real estate lending business and outstanding loan portfolio. For this, Fremont General will receive cash of about 30% of the net loan portfolio, or $1.9 billion, and a participation interest equal to about 70% of the net loan portfolio, which will bear interest at Libor plus 150 basis points.

Fremont, based in Santa Monica, Calif., is a commercial and residential real estate lending company.

Pluristem raises $14.875 million

Moving to the biotech sector, Pluristem Life Systems, Inc. sealed an oversubscribed private placement of stock for $14.875 million.

The company had originally planned to raise up to $13.5 million in the deal.

Pluristem issued a total of 1.19 billion shares in the offering at $0.0125 each to a group of investors that included Technion-Israel Institute of Technology.

In the most recent closing, conducted on Monday, the company issued 550 million shares.

In February, the company sold 640 million shares.

The investors received warrants for an equal number of shares, exercisable at $0.025 each.

On Tuesday, the company's stock gained 7.02% to close at $0.1295 (OTCBB: PLRS).

"The response to this capital raise was extraordinary and provides us with the financing we need to complete the development of our first product, PLX-I, and explore the use of our placental expanded mesenchymal stem cells for other clinical indications," said chief executive officer Zami Aberman, in a statement.

"Our current capital position enables us to develop our business and take advantage of emerging opportunities. I am delighted that these new investors and the inventors of our basic technology have shown such great confidence in Pluristem."

New York-based Pluristem develops stem cell therapies to treat malignant, degenerative and autoimmune disorders.

Teton closes offering

In the energy sector, Teton Energy Corp. wrapped up a $9 million offering of 8% senior subordinated convertible notes.

The notes due May 15, 2008 are convertible into common shares at $5.00 each, a 9% premium to the company's $4.58 closing stock price on Monday.

On Tuesday, the stock gained a penny to end at $4.59 (Amex: TEC).

The offering was originally announced as a $7 million deal but was oversubscribed.

The investors also received warrants for 3.6 million shares, exercisable at $5.00 each.

The notes were sold through Commonwealth Associates, LP.

"We were pleased with Commonwealth's responsiveness to our needs," said the company's CEO, Karl Arleth, in a news release.

"They understood that we are a growing company with evolving needs and Commonwealth helped us structure an instrument that will not constrain our future growth and operations."

"We are excited to be working with Teton," said Robert O'Sullivan, Commonwealth's CEO, in the release. "It is a dynamic company with a first-rate management team and great prospects for strong growth."

Teton Energy, based in Denver, is an oil and natural gas exploration company.

Atlas stock drops

In other resources news, Atlas Energy Resources, LLC's stock fell a day after the company announced a $600 million unit offering conducted as part of an acquisition.

The company's stock fell 67 cents, or 1.89%, to end at $34.78 (NYSE: ATN).

On Monday, the stock gained $4.55, or 14.52%, to end at $35.45, gaining another 46 cents in after-hours trading activity.

In the placement, the company sold class D units at $25.00 each to a group of institutional investors led by Magnetar Capital. The share price is a 19% discount to the company's $30.90 closing stock price on Friday.

The units are convertible on a one-for-one basis for common units.

The Atlas offering is being conducted as part of the company's planned $1.225 billion acquisition of DTE Gas & Oil Co. The acquisition is set to close June 30.

UBS Investment Bank was the placement agent for the offering.

Also connected to the acquisition, the company received an $850 million senior secured revolving credit facility from JPMorgan Chase Bank NA that will be used to fund the remainder of the purchase price.

Pittsburgh-based Atlas is an energy company focused on the development and production of natural gas and oil.

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