Goldman Sachs raises $5 billion from Berkshire Hathaway; Continent Resources, Pluristem sell stock

By Kenneth Lim

Boston, Sept. 23 - Goldman Sachs Group, Inc. led the private placement market on Tuesday with a $5 billion sale of preferred stock to Berkshire Hathaway, Inc.

Meanwhile, Continent Resources Inc. closed an upsized C$2.08 million placement of units, while Pluristem Therapeutics Inc. sold $1.04 million of shares through a direct offering.

Goldman raises $5 billion

Goldman Sachs said it sold $5 billion of 10% perpetual preferred stock to Berkshire Hathaway, the investment company led by Warren Buffett.

The preferred stock is callable at any time at a 10% premium.

Berkshire Hathaway will also receive warrants for $5 billion in common stock, exercisable at $115.00 for five years.

In addition, Goldman Sachs is raising at least $2.5 billion in common equity in a public offering.

New York-based Goldman Sachs is an investment banking, securities and investment management firm that this week received approval to become a commercial bank holding company.

Goldman Sachs common stock (NYSE: GS) closed at $125.05 on Tuesday, gaining 3.54% or $4.27.

The deal will provide Goldman Sachs with a healthy boost in terms of capital and investor sentiment, an equity analyst said.

"This is a strong sign of confidence from Warren Buffett...and it gives them a boost ahead of their public offering," the analyst said.

Goldman Sachs was not in dire need of additional capital, the analyst said.

"They're still profitable, and Goldman Sachs has been one of the stronger investment banks throughout this past year," the analyst said. "But the additional capital provides a nice cushion of security."

In a statement, Buffett, the chairman and chief executive of Berkshire Hathaway, described Goldman Sachs as "an exceptional institution."

"It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance," Buffett stated.

Goldman Sachs chairman and chief executive Lloyd c. Blankfein also said in the statement: "We are pleased that given our longstanding relationship, Warren Buffett, arguably the world's most admired and successful investor, has decided to make such a significant investment in Goldman Sachs. We view it as a strong validation of our client franchise and future prospects. This investment will further bolster our strong capitalization and liquidity position."

Continent closes upsized placement

Continent Resources Inc. said it raised C$2.08 million from a private sale of stock and warrant units.

The deal originally priced for C$1.5 million on June 2 and was increased to C$2.1 million on July 9. The terms of the units were changed on Aug. 11.

The company sold about 8.3 million units at C$0.25 each. Continent common stock (CNQ: CORE) closed at C$0.30 on Tuesday, up by 7.14% or C$0.02.

Each unit consists of one common share and one warrant. The units originally included only a half-share warrant. Each two-year warrant is exercisable at C$0.35.

Proceeds will be used to carry out geological, geochemical and geophysical studies on a package of copper mineral claims the company intends to acquire from Southwest Exploration Group LLC, the initial phase of drilling on Continent Resources' Lone Mountain property and for general working capital.

Based in Calgary, Alta., Continent Resources is a junior mineral exploration company engaged in the acquisition and exploration of strategic mineral properties.

"Raising over C$2 million in today's challenging market is a testament to the Continent geo team and to our extraordinary copper properties," Continent chief executive Robert Bick said in a statement. "We will have a drill in the ground by the end of October and anticipate results by year-end."

Pluristem raises $1.04 million

Pluristem Therapeutics said it is selling $1.04 million of its common stock through a registered direct offering.

The sale will comprise 900,000 common shares at $1.15 apiece. Pluristem common stock (Nasdaq: PSTI) gained 2.29% or about $0.02 to close at $0.89 on Tuesday.

The investors will also receive a five-year warrant exercisable for 675,000 shares at $1.90.

Haifa, Israel-based Pluristem develops stem cell production technology and commercializes cell therapy products.

"We believe the purchase of our shares by a sophisticated investor at above market price reflects confidence in our technology and strategy and that Pluristem's PLX (PLacental eXpanded) cells may bring a breakthrough in regenerative medicine," Pluristem president and chief executive Zami Aberman said in a statement.

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