It pays to be patient in this market. In May last year, entrepreneurs Craig Mathieson and Nir Pizmony were all set to launch a takeover offer for toy company Funtastic at 80c a share. Yesterday, the pair agreed to underwrite a capital raising that will deliver them a 20% stake in the company for 15c a share. The lesson for entrepreneurs who are looking for bargains is clear: if you target is looking wobbly in any way shape or form, take a deep breath, wait a few weeks and make a lower offer.
Of course, Mathieson and Pizmony face a tough job in turning Funtastic around. The company has been destabilised badly in the last few years (most recently by the collapse of ABC Learning, which was a key customer) and the retail environment is terrible. It might take a while before we know if this was a bargain buy or a dud buy.