Topps board member, investor Ajdler responds to company's claims

By Lisa Kerner

Charlotte, N.C., June 4 - Topps Co., Inc. investor and board member Arnaud Ajdler reacted to "false and misleading statements" made by the company on May 31 in another letter to the company's board.

The investor denies Topps' assertion that the ad hoc committee approved the retention of Willkie Farr & Gallagher LLP, a law firm chaired by Topps director Jack Nusbaum.

Ajdler, affiliated with Crescendo Partners II LP, is a member of an ad hoc committee formed to enhance Topps' value.

"I find it particularly ironic that the board uses a false statement in order to attempt to demonstrate my alleged 'duplicity,'"Ajdler said in the letter.

Ajdler's letter also cited a proxy contest involving infoUSA Inc. in which the proxy advisory firm Glass Lewis recommended that "stockholders withhold votes for an incumbent director because he is also a partner at a law firm which received more than $1 million from infoUSA for legal services."

"Finally, in your communications, you like to repeat that Crescendo wants to take over Topps without paying stockholders for their shares. Once again, you are misleading your stockholders," the letter stated.

Ajdler said that while buyers would typically pay stockholders a premium of 20% to 30% for their shares, Topps has approved a transaction "that would pay stockholders a meager 3% premium and a significant discount to where the shares are currently trading." The investor also denied that Crescendo is trying to take Topps private.

"If the ill-advised Eisner merger is voted down, Crescendo will ask its fellow stockholders, the true owners of Topps, to replace seven of the incumbent directors on the board with a new slate. This well-qualified slate is committed to taking all necessary actions to improve the company's capital structure and operations for the benefit of ALL the stockholders," Ajdler added.

Topps' May 31 letter to Ajdler referred to the board member's previous communication as "unproductive, self-serving and contrary to maximizing stockholder value." The Topps letter was included as part of a schedule 14A filing with the Securities and Exchange Commission.

"Your intent appears clear - you want to kill the Tornante and Madison Dearborn deal and take over Topps without paying stockholders for their shares. Moreover, you and your dissident colleagues are the only directors with a real conflict of interest on the Topps Board," the letter signed by Topps chairman and chief executive officer Arthur T. Shorin stated.

On March 6, Topps announced it had entered into a definitive agreement to be acquired by Michael Eisner's the Tornante Co. LLC and Madison Dearborn Partners LLC 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, which includes a $12 million termination fee, is expected to close in the third quarter of 2007.

Topps had a 40-day "go-shop" period under the agreement.

On May 24, the company said it received an unsolicited indication of interest from the Upper Deck Co. to acquire Topps for $10.75 per share.

Topps' board doubted whether Upper Deck would be capable of financing its proposed acquisition and considered the transaction risky, according to a previous news release.

Topps is a New York-based marketer of sports cards, entertainment products and confectionery.

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