EXCO plans $2 billion private placement of convertible preferreds; Vion prepares to seal $60 million issue

By Sheri Kasprzak

New York, Feb. 14 - EXCO Resources, Inc. grabbed PIPE headlines Wednesday with its planned $2 billion private placement of convertible preferred stock.

The deal includes up to $400 million in 6% cumulative convertible perpetual preferreds and up to $1.6 billion in 11% cumulative preferreds.

The 6% preferreds are convertible into common shares at $20.00 each.

After the second anniversary of issuance, the dividend rate of the 6% preferreds automatically increases to 8%.

The 11% preferreds automatically convert into common shares once shareholders approve the issuance of underlying common shares. EXCO's shareholders are set to discuss the approval at a meeting in the third quarter.

Proceeds will be used for the acquisition of oil and natural gas properties in the Vernon and Ansley fields in Louisiana from Anadarko Petroleum Corp. The rest will be used to repay outstanding debt of subsidiary EXCO Partners Operating Partners, LP.

EXCO's stock remained unchanged at $18.10 Wednesday (NYSE: XCO).

Dallas-based EXCO is an oil and natural gas exploration, acquisition, development and production company.

Vion raises $60 million

Meanwhile in the pharmaceutical sector, Vion Pharmaceuticals, Inc. said it plans to wrap a $60 million convertible note offering, one of several drug deals in the market this week.

One sellside market source said drug stocks have benefited from gains among the bigger companies.

"When the big guys do well, it helps the smaller ones to a degree," he said. "Of course you do have some issuers who are just so desperate for cash that they have to sell at whatever they can get."

Vion actually sold 7.75% notes convertible at a 20% premium to market.

The notes due 2012 are convertible at $1.92 each, a 20% premium to the company's $1.60 closing stock price on Tuesday.

For every $1,000 in principal, the investors will receive warrants for 130 shares. Each warrant is exercisable at $2.00 for three years.

Vion's stock got off to a rocky start on Wednesday, giving up 9.37%, or 15 cents, by 10:40 a.m. ET.

The offering is set to close Feb. 20.

Proceeds will be used for general corporate purposes.

Based in New Haven, Conn., Vion is a pharmaceutical company focused on developing treatments for cancer.

Halozyme pockets $20 million

In other biotech news, Halozyme Therapeutics, Inc. sealed a $20 million private placement of stock. The offering was conducted as part of Halozyme's distribution agreement with Baxter Healthcare Corp.

Baxter International Inc., an affiliate of Baxter Healthcare, bought 2,070,394 shares at $9.66 each.

Proceeds will be used for research and development as well as general corporate purposes.

Under the Baxter distribution agreement, Baxter will develop and commercialize Halozyme's proprietary recombinant human hyaluronidase, rHUPH20.

The company's stock got a boost from the deal, gaining 11.6%, or 91 cents, to close at $8.76 on Wednesday and putting on another 45 cents in after-hours trading (Nasdaq: HTI). Volume was also elevated with 820,395 shares traded compared with the average 626,189 shares.

San Diego-based Halozyme develops recombinant human enzymes used to treat infertility and cancer as well as other disorders.

Bio-Bridge raises $3 million

Elsewhere in the sector, Bio-Bridge Science, Inc. completed a private placement of series A convertible preferred stock for $3 million.

The company issued 4 million shares of the preferred stock at $0.75 each.

The preferreds are convertible into common shares at $0.75 each. The conversion price will decrease if the company sells equity for less than $0.75 before the call or conversion within 12 months of the closing date. The price will never drop below $0.50.

The investors also received warrants for 3 million shares, exercisable at $1.00 each for three years.

The stock closed unmoved at $0.90 Wednesday (OTCBB: BGES).

Based in Oak Brook, Ill., Bio-Bridge develops treatments for infectious diseases.

Uni-Pixel wraps offering

Moving to the tech sector, Uni-Pixel, Inc. settled an offering of 8% series B convertible preferreds for $12 million.

The company sold 3.2 million shares of the 8% preferreds at $3.75 each to Tudor Investment Corp. Each preferred is convertible into five common shares.

Proceeds will be used for the development of the company's prototype and for the licensing of its Time Multiplexed Optical Shutter display technology.

"Uni-Pixel's unique TMOS approach to color display technology is both revolutionary and disruptive, creating a significant opportunity for future growth," said Rob Broggi, director of technology, media and telecommunications research at Tudor, in a statement. "We are excited about our investment and look forward to working with a truly impressive team of managers and engineers at the company."

"The $12 million series B convertible preferred financing from Tudor enables Uni-Pixel to further prototype development and begin the transition from an early stage development company to executing its business model of licensing TMOS display technology to existing flat-panel manufacturers," said Reed Killon, Uni-Pixel's president, in a news release.

"We are pleased to have an institutional investor with an exceptional reputation like Tudor supporting Uni-Pixel."

On Wednesday, Uni-Pixel's stock skyrocketed by 66.67%, or 60 cents, to end at $1.50 (OTCBB: UNXL).

Based in The Woodlands, Texas, Uni-Pixel develops flat panel color display technology called Time Multiplexed Optical Shutter.

Research Frontiers' $6.65 million deal

In other tech news, Research Frontiers Inc. closed a direct placement of its stock for $6,650,494.

The company sold 682,102 shares from a shelf registration at $9.75 each.

News of the deal sent the company's stock diving 11.26%, or $1.25, to settle at $9.85 (Nasdaq: REFR). The stock rebounded somewhat in after-hours trading, gaining 25 cents.

Proceeds will be used to expand the company's operations, including increased marketing of the company's light-control film technology. The rest will be used for working capital and general corporate purposes.

"Over the last six months, Research Frontiers has been able to strengthen its financial condition and resources in preparation for the new phase which has now arrived in the SPD [suspended particle device] industry," said Joseph Harary, the company's president, in a statement.

Located in Woodbury, N.Y., Research Frontiers develops light-control coatings for glass and plastics.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.