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Gold/Mining/Energy : CSI Credit Systems CSU.VSE
CSU 0.6300.0%Aug 14 4:00 PM EDT

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To: ED BAARTMAN who wrote (57)6/4/1999 10:24:00 AM
From: keith schaefer   of 90
 
ROYAL BANK OFFERS TO ACQUIRE CSI CREDIT SYSTEMS
6/4/99 9:36

I never would have guessed this in a million years. Talked to mgmt, they say on valuation terms they got a very good deal, I think it works out to something like 8X revenue (and nobody can argue that that's not a good deal, but...)though I think a Joint Venture with the Royal would have sent the stock to $2.00, and then they could have raised all the money they need to compete in the market.

But evidently the Royal could play hard ball and say it's all or nothing. They certainly came in at the right time, just as this company was going to rock. Certainly not the deal I was expecting.

Is this the final offer or just the first? Could this stock go higher than $1.30?

Here it is.

CSI Credit Systems International Inc. ("CSI") announced today
that, subject to certain terms and conditions, Royal Bank of
Canada, through an indirect wholly owned subsidiary (the
"Offeror") will make an offer (the "Offer") to acquire all the
outstanding common shares of CSI for $1.30 cash per share. Under
the terms of an acquisition agreement, dated as of June 3, 1999
between the Offeror and CSI, the Board of Directors of CSI has
agreed to recommend the offer to its shareholders and to
cooperate with Royal Bank to complete the transaction.

An offering circular containing details of Royal Bank's offer is
expected to be mailed to registered holders of common shares on
or about June 15, 1999. A directors' circular supporting the
transaction will be mailed to the shareholders at the same time.
The Offer is being made through 583969 B.C. Ltd., an indirect
wholly owned subsidiary of Royal Bank, and is expected to expire
at the close of business on July 6, 1999, unless extended. The
transaction is conditional upon, among other things, regulatory
approval and there having been deposited under the offer and not
withdrawn at least 75% of the CSI shares outstanding (calculated
on a fully diluted basis at the expiry of the Offer). It is
anticipated that the transaction will close by July 19, 1999.

If the Offer is successful CSI will operate as an indirect
wholly-owned subsidiary of Royal Bank and remain under its
current management. CSI will continue to offer ERNEX(tm) loyalty
marketing solutions, loyalty program consultation and development
for retailers.

CSI is a transaction information company specializing in business
to customer transactions for the purposes of electronic
marketing. CSI offers retail businesses the opportunity to market
products and services on a customer specific basis through a
comprehensive and fully integrated network of customer
information gathering software and hardware.

For more information contact:
J. Caren Holtby, Corporate Communications,
at (604) 415-1517 or email: choltby@csicredit.com
website - www.ernexinc.com

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