Towerstream secures $40 million from stock sale; Metro One seals $7.8 million deal

By Sheri Kasprzak

New York, June 6 - Towerstream Corp. led PIPE news on Wednesday with a $40 million registered direct offering of stock.

News of the deal sent the company's stock plummeting by 32.71%, or $1.92, to end at $3.95 (Nasdaq: TWER). In after-hours trading, the stock gained 8 cents.

The deal includes 10 million shares, which will be sold under the company's shelf registration.

Lazard Capital Markets LLC is the lead agent for the deal, which is expected to wrap up on June 11.

"We have spoken with many investors who understand the value of our WiMAX business," said Jeff Thompson, the company's chief executive officer, in a statement.

"We believe that there is a growing interest in the future of WiMAX and our position in the WiMAX marketplace. The proceeds from this offering will provide us with the capital to build out our target markets and solidify our position as a WiMAX leader."

Proceeds will be used to build out the company's target markets.

Towerstream, based in Middletown, R.I., is a fixed wireless service provider.

Limited partnerships doing PIPEs

One sellside market source acknowledged on Wednesday that more limited partnerships are doing offerings - and in a big way.

"I think they've discovered the market just because there are more activities like acquisitions going on now," he said. "There have been LP's in the marketplace before but it does seem like there are more now than ever. There are bigger offerings because there are big things going on, like mergers and acquisitions."

Among the offerings announced this week by limited partnerships is a $1.125 billion deal from Atlas Pipeline Partners, LP connected to that company's acquisition of natural gas gathering systems from Anadarko Petroleum Corp.

Also this week, EV Energy Partners, LP closed a $117.6 million offering connected to the acquisition of a natural gas property.

Metro One closes offering

After sealing a $2.2 million private placement of series A convertible preferred stock, Metro One Telecommunications, Inc. settled a $7.8 million offering of convertible notes.

The $2.2 million offering is the initial tranche of a potential $10 million placement.

The 220 shares of preferred stock were issued to Columbia Ventures Corp. and Everest Special Situations Fund LP, the company's largest shareholders.

The preferreds are convertible into 1,235,955 common shares at $1.78 each.

The investors also received warrants for 77 shares of preferred stock, exercisable at $10,000 each.

Connected to the placement, the company also issued $7.8 million in convertible notes.

The 13% notes are due in four months and are convertible into 780 shares of preferred stock once the shareholders approve the issuance of additional preferreds.

Upon conversion of the notes, the investors will receive warrants for 273 shares of preferred stock.

Proceeds from the preferreds offering will be used for general corporate purposes.

On Wednesday, the company's stock closed unchanged at $2.05 (Nasdaq: INFO).

Based in Portland, Ore., Metro One provides enhanced directory assistance and other information services.

Atlas Pipeline stock edges up

After announcing a planned $1.125 billion private placement earlier this week, Atlas Pipeline Partners, LP's stock scooted ahead on Wednesday.

The stock gained 27 cents, or 0.50%, to end at $54.39 (NYSE: APL).

In the placement, Atlas Pipeline Partners plans to sell common units at $44.00 each, a 20% discount to the company's $55.05 closing stock price on Monday. On Tuesday, Atlas Pipeline Partners' stock fell 93 cents, or 1.7%, to end at $54.12.

Atlas Pipeline Partners' parent company, Atlas Pipeline Holdings, LP, plans to buy $168.75 million of the offering and plans to conduct its own PIPE to fund the purchase.

Holdings' stock gained 99 cents, or 2.54 %, to settle at $40.02 (NYSE: AHD). On Tuesday, Holdings' stock gave up 53 cents to end at $39.03.

In the Holdings' offering, the company plans to issue units at $27.00 each, a 31.7% discount to the company's $39.56 closing stock price on Monday.

UBS Securities, LLC is the placement agent for both offerings.

Both the Atlas Pipeline Partners and Atlas Pipeline Holdings offerings are expected to close July 11.

Based in Moon Township, Pa., Atlas Pipeline Partners is a natural gas pipeline operating company.

Palm stock climbs

In other secondary market activity, shares of Palm, Inc. continued to rise on Wednesday after the tech company announced plans to close a $325 million placement to partially fund its $940 million cash distribution plan.

On Wednesday, the stock settled up 34 cents, or 1.93%, at $17.96 (Nasdaq: PALM). In after-hours trading, the stock gave up a penny.

On Tuesday, the stock gained 5 cents to end at $17.62, and on Monday, when the offering was announced, the stock gained 9.2%, or $1.48, to close at $17.57.

In the placement, Elevation Partners plans to buy $325 million in convertible preferred stock. The preferreds are convertible at $8.50 each, a 16% premium to the post-distribution stock price over the 10 trading days ended June 1.

Once the deal is done, Elevation will own about 25% of Palm's outstanding stock on an as-converted and diluted basis.

The offering is expected to close in the third quarter of the calendar year.

To further fund the cash distribution, Palm has received commitments for $400 million in new debt and a $40 million revolving credit facility. JPMorgan and Morgan Stanley are the joint bookrunners for those facilities.

Once the offering is closed, Jon Rubinstein, former senior vice president of hardware engineering and head of Apple's iPod division, will become Palm's executive chairman.

Based in Sunnyvale, Calif., Palm develops mobile computing technologies.

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