Private equity group bids for children's toy firm

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A private equity group, led by Archer Capital, has made a A$132 million (£65 million) takeover bid for children's toy wholesaler Funtastic.

The proposal is for a 100 per cent merger and acquisition of the toy firm and comes several months after Funtastic recorded a 60 per cent drop in net profit for 2007.

Shares in the company grew by 30 per cent as the takeover bid was announced, peaking at 73 cents (35 pence) today.

A spokesperson for Funtastic told The Australian: "Funtastic is not in a position to give any assurance that the proposal's preconditions will be satisfied, that its board's evaluation will lead to a recommended proposal or that the proposal will proceed."

Funtastic was established in 1994 and claims to be one of Australia and New Zealand's leading distributors of children's toys.

In 2006, the company led an acquisition of Madman, an independent distributor of DVDs to retail and rental stores.