Cell Therapeutics to wrap $20.25 million offering; Sport Supply secures $18.3 million

By Sheri Kasprzak

New York, July 26 - Cell Therapeutics, Inc. led PIPE news on Thursday, announcing the pending completion of a $20.25 million offering of series C convertible preferred stock.

The company intends to issue 20,250 shares of the 3% preferred stock at $1,000 each to institutional investors, some of which are existing shareholders.

The preferreds are convertible into common shares at $3.90 each, and the investors will receive a number of warrants equal to half of the investment divided by $3.90. Each warrant is exercisable at $4.53 for six months.

The underlying shares are being issued under the company's shelf registration.

The offering is set to close on Friday.

Rodman & Renshaw, LLC is the placement agent.

In pre-market activity, the company's stock sank by 9.87% by 9 a.m. ET. At the end of the session Thursday, the stock dove by 11.85%, or 54 cents, to close at $4.01 (Nasdaq: CTIC).

Cell Therapeutics conducted its last placement in April when it sold $37.2 million 3% convertible preferred shares.

The preferreds are convertible into common shares at $6.73 each following its one-for-four reverse stock split that went into effect April 15.

Based in Seattle, Cell Therapeutics develops, acquires and commercializes treatments for cancer.

A market source said Thursday that drug stocks could very well fuel more biotech deals.

"It's probably too early to tell right now but [drug] stocks are improving," he said. "Some big names released solid earnings so that could feed the stocks of smaller companies. It might entice some of the smaller names that had been considering a PIPE to move forward."

Meanwhile, the stock market took a serious dive with the Dow Jones Industrial Average falling 311.50 to close at 13,473.57. The Nasdaq composite index gave up 48.83 to close 2,599.34, and the Standard & Poor's 500 composite index dropped by 35.43 to close at 1,482.66.

Sport Supply to raise $18.3 million

In other PIPE news, Sport Supply Group, Inc. announced plans Thursday to close an $18.3 million private placement of stock with Andell Holdings, LLC.

Andell has agreed to purchase 1.83 million shares at $10.00 each, a slight premium to the company's $9.98 closing stock price on Wednesday.

The deal is expected to closing within the next few days, according to a statement released by Sport Supply on Thursday.

The company's stock gained 3 cents on Thursday to end at $10.01 (Amex: RBI).

Volume was also off with 8,500 shares traded compared with an average 25,286 shares.

Connected to the offering, Andell will be allowed to nominate a designee to Sport Supply's board of directors.

Proceeds from the offering will be used for bank debt repayment.

"We are delighted to have entered into this agreement with Andell," said Adam Blumenfeld, Sport Supply's chief executive officer, in a news release.

"Andell, together with its executives, have the pedigree, capital resources and rich investment history that will help further cultivate our vision of optimization, execution and growth. The company has engaged in a number of initiatives aimed at increasing cash flows and reducing debt since the November 2006 closure of our SSG acquisition, including the improvement in collection of receivables and reduction of inventories through the consolidation of facilities and elimination of SKUs. These efforts have yielded a $14.5 million decrease in outstanding bank debt in the last seven months."

Blumenfeld said in the release that the completion of this placement will reduce bank debt by another $18 million to about $5 million.

"We couldn't be more excited about our investment in Sport Supply Group," said Andell CEO Andrew Hauptman in a statement.

"Sport Supply Group's business of providing best-in-class products and distribution in the sports equipment supply chain fits well with Andell's focus on active lifestyles and sports-related businesses."

Dallas-based Sport Supply manufactures and distributes sporting goods and team uniforms.

Origin raises $40 million

Elsewhere, Origin Agritech Ltd. sealed a $40 million offering of 1% convertible notes.

Citadel Investment Group, LLC bought the notes, which mature July 25, 2012. The notes are convertible into common shares at $11.50 each.

Proceeds will be used for future acquisitions and for working capital.

On Thursday, the company's stock fell by 2 cents to end at $8.87 and lost another 3 cents in after-hours trading (Nasdaq: SEED).

Beijing-based Origin supplies hybrid crop seeds in China.

NaiKun Wind prices C$35 million deal

Moving north of the border, NaiKun Wind Energy Group Inc. negotiated the terms of a private placement for C$35,155,100.

The company intends to sell 7.506 million common shares at C$3.35 each and 2.6 million flow-through shares at C$3.85 each

Cormark Securities Inc., the lead agent, has a greenshoe for up to 1.5 million additional common shares.

On Thursday, the company's stock fell by 30 cents to end at C$3.50 (TSX Venture: NKW).

Vancouver, B.C.-based NaiKun develops wind farms for energy generation.

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