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Gold/Mining/Energy : Signature Brands Ltd.: (SBX:TSE) SGNTF -- Ignore unavailable to you. Want to Upgrade?

To: Keith Minler who wrote (261)	4/21/1999 7:57:00 AM
From: Mr. Oil	Read Replies (2) \| Respond to of 776

>>Jeez Ray you forgot to mention that they have to issue 185,000,000 shares to CDplus.com.to pay for the deal. << Well I didn't really forget to mention that but assumed that folks understood what a reverse takeover means. Let me try to explain. As I understand the process, this reverse take over is done by issuing shares of Signature Brand so that the CD Plus.com holds sufficient shares in order for the existing shareholders of Signature Brand to be invested in CD Plus.com to the tune of 10% of the merged entity along with its future earnings potential. On the surface one might assume that issuing so many shares would be detrimental to the company share price. This however is not necessarily true! It is more a question what one is getting for the dilution. The shares of the SBX represent the market value of the company. For an exchange of a portion of those shares SBX (done by issuing shares to CD Plus.com) shareholders will receive a portion of a much larger company which has more assets, cash, staff, infrastructure, revenues, profit and a brighter future. The share price of SBX will be determined by what value the market will place on CD. Plus.com and their future earnings potential. As to what that ultimately will be we won't know till the deal is done and they begin trading as the new entity...with its internet and store front business. So it is not quite like issuing shares to some one to raise cash. It puts SBX into a real business which is now making money and has a lot of upside potential. For shareholders of SBX, I see this to hold excellent promise as we move ahead. Hope this helps. Ray