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EXCERPTS
Toy distributor Funtastic has been scrutinising the terms of its exclusive supply agreement with ABC Learning Centres.
Funtastic has an exclusive agreement to supply ABC in Australia and overseas after acquiring the Judius educational toy business from the company for $44.6 million in December 2006.
The Australian Financial Review says it understands the ABC is required to continue complying with the supply agreement even if the business changes hands, but says the terms of the deal are likely to come under scrutiny if ABC Learning Centres are sold.
ABC is the largest shareholder in Funtastic after taking a 17.9% stake worth $39.6 million as part of the Judius transaction and lifting its holding to 19.9% last December.
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Australia's largest child-care operator will examine the possible sale of 1000 centres it operates in North America.
Facing questions over its debt, ABC Learning Centres entered a two-day trading halt on Wednesday after its shares fell 42% on Tuesday.
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- reprinted from Inside Retailing