Topps Agrees to Sell; Shorin Will Retire

The Topps company has agreed to go private in a deal announced Tuesday morning. Former Disney exec Michael Eiser is behind the bid but Topps is still free to seek other offers.

Topps’ days as a publicly-owned company may be nearing an end.

Early Tuesday morning, the trading card and candy maker announced it had entered into a definitive agreement to be acquired by Michael Eisner’s The Tornante Company LLC and Madison Dearborn Partners, LLC, a private equity firm. Under the terms of the agreement, Topps stockholders will receive $9.75 per share in cash, for a total transaction value of approximately $385.4 million. The company’s board of directors has approved the merger agreement and is recommending that Topps stockholders vote in favor of the deal.

"After careful and thorough consideration, our board of directors determined that this transaction is in the best interests of Topps stockholders at this time," said Arthur T. Shorin, Chairman and Chief Executive Officer of Topps. "This will be a change in ownership, not a change in direction. We look forward to working with an experienced group of investors who understand the creative aspects of our business and are committed to our continued growth."

As part of the agreement, Shorin will retire as CEO within 60 days of the merger. However, the deal also allows Topps to solicit other offers for the next 40 days. Topps stock was up slightly on Wall Street Tuesday morning, trading at nearly $10 per share, the high end of the range it had been selling at over the last several months.

One of the company’s new board members, however, has already started a campaign to kill the deal with Eisner’s group. Arnaud Ajdler, along with the investment firm Crescendo Partners II, sent a letter to stockholders indicating a belief that the deal undervalues Topps. Crescendo owns about 6.6 percent of the company’s shares, according to with the Securities and Exchange Commission.

"I believe that the process that led to the signing of the merger agreement was flawed in that the board of directors did not shop the company and thus failed to maximize the competitive dynamics of a sale transaction that would have garnered the highest price available," Ajdler wrote.

Scott A. Silverstein, President and Chief Operating Officer of Topps, and Shorin’s son-in-law, said, "While there is still much work to be done, we are proud of the
achievements of our dedicated and talented employees whose efforts over the
past few years have made this transaction possible. We have realized
dramatic changes in our business and have taken numerous actions to
implement our strategic plan. We look forward to working with our new
owners to address the challenges that lie ahead, as we continue to grow the

Speaking on behalf of the investors, Eisner noted, "Topps is a
wonderful company with a powerful brand portfolio and a rich history.
Topps’ management team and employees are the best in the business, and we
look forward to working with all of them to grow the company in new and
exciting ways."

The transaction, which is not contingent upon financing, is subject to
the approval of Topps stockholders, regulatory approvals and other
customary closing conditions, and is expected to close in the calendar
third quarter.

Read more: Topps’ new blood pushing change (9/06)

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