Upper Deck interested in acquiring Topps for $10.75 per share

By Lisa Kerner

Charlotte, N.C., May 24 - The Topps Co., Inc. received an unsolicited indication of interest from the Upper Deck Co. to acquire Topps for $10.75 per share.

Upper Deck was previously interested in offering the same price for the company during Topps' "go shop" process under its existing merger agreement with Michael Eisner's the Tornante Co. LLC and Madison Dearborn Partners, LLC.

Topps' board doubted whether Upper Deck would be capable of financing its proposed acquisition and considered the transaction risky.

The latest indication of interest from Upper Deck has "material outstanding issues," including the availability of committed financing, the completion of a due diligence review and Upper Deck's continued insistence on limiting its liability, a company news release stated.

Both Tornante and Madison Dearborn granted a waiver allowing Topps to engage in discussions and negotiations with Upper Deck.

On March 5, Topps agreed to be acquired by Tornante and Madison Dearborn for $9.75 per share in cash in a transaction valued at $385.4 million. Topps' board of directors approved the merger agreement and recommended that its shareholders also approve the deal. The transaction includes a $12 million termination fee.

Investor and Topps' board member Arnaud Ajdler criticized the company's board for not soliciting comments from any of the three dissenting directors with regard to the preliminary merger proxy and failing to provide "relevant facts" surrounding the proposed transaction in a schedule 13D filing with the Securities and Exchange Commission on April 19.

Ajdler also clarified that his opposition to the merger "stems from the fact that the price is inadequate. At a mere 3% premium based on the average closing prices of the 20 trading days preceding the signing of the merger agreement, this buyout is not in the best interest of the company's stockholders and it does not maximize stockholder value," the investor stated in his letter to the board.

On March 14, Ajdler blasted the company in a letter saying the company's board of directors had "set a new low in corporate governance" with the seven-to-three vote in favor of the merger agreement valued at $385.4 million. Ajdler accused the board of "ramrodding" during a "telephonic board meeting."

Ajdler is affiliated with Crescendo Partners II LP, Series Y and others beneficially owning 2,547,700 shares, or 6.6%, of the New York-based marketer of sports cards, entertainment products and confectionery.

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