Banking & Finance

Secondary Offerings Still Coming Strong (MAIN, OEH, EPB, ENMD, TK, NDAQ, NLST, ARIA)

The end of 2009 was marked by many companies selling stock via public secondary offerings.  2010 has not seen the floodgates open wide, but the secondary offerings are coming.  We have offerings sold or filed to sell from Main Street Capital Corporation (NASDAQ: MAIN), Orient-Express Hotels Ltd. (NYSE: OEH), El Paso Pipeline Partners, L.P. (NYSE: EPB), EntreMed, Inc. (NASDAQ: ENMD), Teekay Corporation (NYSE: TK), NASDAQ OMX Group, Inc. (NASDAQ: NDAQ), Netlist Inc. (NASDAQ: NLST), and ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA).

This is unfortunately not even the entire list.  We have compiled the data on the specifics of each and shown how each offering compares to the size of each company.

Main Street Capital Corporation (NASDAQ: MAIN) sold 2,500,000 shares of common stock at $14.75 per share to raise approximately $34.8 million.  It intends to use approximately $12 million to repay outstanding debt borrowed under its $30 million investment credit facility to fund Main Street Capital II, LP capital commitments.  It intends to use the remaining net proceeds to make investments in lower middle-market companies in accordance with its investment objective and strategies, pay operating expenses and other cash obligations and for general corporate purposes. The underwriters were Morgan Keegan, BB&T Capital Markets, Scott & Stringfellow, Janney Montgomery Scott, Ladenburg Thalmann & Co. , and Madison Williams.  Main Street’s market cap is approximately $160 million before any effects, if any, of this offering.

Orient-Express Hotels Ltd. (NYSE: OEH) sold 12,000,000 Class A common shares at a price of $10.00 per share.  Net proceeds from this offering are expected to be approximately $114 million and will be used to pay the cash portion of the purchase price of two hotel properties located in Taormina, Sicily.  The remaining cash is for general corporate purposes.  The deal is brought by Deutsche Bank and Barclays Capital as joint book-running managers for the offering.  The market cap here is approximately $772 million before teh effects of the offering.

El Paso Pipeline Partners, L.P. (NYSE: EPB) has filed to sell some 8,000,000 common units in a public secondary offering and it intends to use the net proceeds for general partnership purposes.  This includes potential future acquisitions and growth capital expenditures. The partnership may apply some or all of the net proceeds to reduce its outstanding borrowings under its revolving credit facility.  Citigroup, BofA Merrill Lynch, Barclays Capital, UBS Investment Bank, and Wells Fargo Securities will be the joint book-running managers; co-managers are listed as Goldman Sachs, J.P. Morgan, and Morgan Stanley.  This will raise close to $200 million and the market cap is about $3.2 billion before considering the effects of this offering.

EntreMed, Inc. (NASDAQ: ENMD)  has completed a registered direct offering of $2.5 million in common stock, although this is probably too small to spend much time on.  It sold 3,125,000 shares at $0.80 per share, approximately a 7% discount.  Wharton Capital Markets was the sole placement agent in the offering.

This morning came an SEC filing from Teekay Corporation (NYSE: TK) covering the sale of up to $300 million in senior notes.  The joint book-runners are listed as J.P. Morgan, Citi, and Deutsche Bank; Co-managers are BNP PARIBAS, DnB NOR Markets, ING Wholesale, and Scotia Capital.  The company intend to use approximately $190 million of the net offering proceeds to repurchase Senior Notes due July 2011, subject to the tender; and the remaining net proceeds to repay a portion of debt.  Its market cap is $1.9 billion.

Earlier this week came an SEC filing from The NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) covering the sale of an unspecified amount in Debt Securities, Preferred Stock, Common Stock, Warrants, Depositary Shares, Purchase Contracts and Units.  This was its automatic shelf registration, which does not mean any sale is imminent.

This week also came a filing from Netlist Inc. (NASDAQ: NLST) covering the potential sale of up to $30 million in a mixed securities shelf covering the sale of any combination of Common Stock, Preferred Stock, Warrants, Depositary Shares, and/or Units.  Netlist is the one that has been all over the place of late and this market cap today is around $100 million without considering any effect of potential dilution.  The use of proceeds is for capital expenditures, working capital, and other general corporate purposes.

Also earlier this week came a filing from ARIAD Pharmaceuticals, Inc. (NASDAQ: ARIA) covering the sale of up to $125 million in  Common Stock, Preferred Stock, Debt Securities, Warrants, Rights, Purchase Contracts, and Units in a mixed securities registration.  The market cap here without considering any dilutive effect is now $257 million.  The use of funds is for general corporate purposes: R&D and clinical trials, product manufacturing, intellectual property protection and enforcement, working capital, repayment or refinancing of debt, capital expenditures, and to fund possible acquisitions.

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January 13, 2010

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