If the Deals Direct acquisition goes ahead, I think MNZ will do...

If the Deals Direct acquisition goes ahead, I think MNZ will do what ECQ is doing right now, and what many others have done in these circumstances before, in fact, there is a pretty clear model to follow (that has been used hundreds of times).

They will value the companies, for the reverse takeover.

There will be a consolidation of probably 1:10, bringing the shares on issue down to around 30m, share price at 30c, then a price will be set on DD shares and owners offered new MNZ shares via a formula (probably for around 10c - but we may never know the actual deal, like ECQ, because of commercial in confidence), and then a capital raising, probably at 25c for $20m or so.

This is what the deal makers are now nutting out.

Post the reverse takeover, we might have, MNZ name change to Deals Direct, about 150m shares quoted, price commencing at about 25c, new Deals Direct directors and MD/CEO, increased shareholding from Telstra, and then... away they go!

Effectively, it is a faster and (sometimes) easier way to emulate a 25c or 30c IPO and initial listing.

As for Telstra, I am just making a wild assumption here. I think they will either exit completely, or they will up their stake to 30% or more and take a seat on the board, with a view to eventually making Deals Direct the online global shopping arm of Telstra Corp. Who knows what Telstra will do.

This kind of reverse takeover formula has worked successfully hundreds of times before, it just depends on aligning up all the numbers, taking care of the regulatory issues, and how bad each of the participants wants to complete the deal.

ECQ's similar acquisition of Cynata at the moment seems to be going without many issues, let's hope MNZ's reverse takeover by Deals Direct also goes smoothly.

Gw