Don’t invite Arnaud Ajdler and Arthur Shorin to the same cocktail party.
A day after one of the ‘young gun’ shareholders opposed to the proposed takeover of Topps penned a nasty letter to company management accusing leadership of having a conflict of interest, President Arthur Shorin responded with some pointed comments of his own. Here’s the letter he sent, followed by Ajdler’s response Monday and some observations from one industry analyst website.
May 31, 2007
Mr. Arnaud Ajdler
10 East 53rd Street
New York, New York 10022
We find your May 31, 2007 letter to be unproductive, self-serving and
contrary to maximizing stockholder value. 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.
As even you would acknowledge, Upper Deck is a significant competitor
of Topps and could benefit from obtaining highly sensitive information
about Topps or derailing a transaction involving Topps. Prudence dictates
that the Board approach any Upper Deck discussion carefully and
thoughtfully. Having said that, the Board takes its responsibility to
maximize stockholder value seriously.
During the Company’s "go shop" period, Topps received an indication of
interest from Upper Deck of $10.75 per share. At the end of the "go shop"
period, however, because Upper Deck failed to provide any evidence of
financing and recognizing that the proposal still had other significant
issues, the Topps Board determined to discontinue discussions at that time.
Six weeks later, on May 21, 2007, Topps received a renewed, unsolicited
indication of interest from Upper Deck to acquire Topps at $10.75 per share
which was this time accompanied by a conditional "highly confident" letter
from a commercial bank. Promptly thereafter, Topps asked for and received a
waiver from Tornante and Madison Dearborn to again engage in discussions
and negotiations with Upper Deck.
Since then we have been diligently working to determine whether Upper
Deck can appropriately address the antitrust, financial and other legal
impediments to completing a transaction with Topps. You on the other hand
have, without any factual basis whatsoever, criticized those efforts
without ever indicating whether the $10.75 offer would even be acceptable
or how you would deal with the significant issues with Upper Deck’s
proposal. At the very least, we believe stockholders are entitled to know
under what conditions, if any, you would accept the offer from Upper Deck.
Finally, it is unfortunate that you continue to make accusations and
implied innuendo that are totally untrue. As an example of your duplicity,
as members of the ad hoc committee of the Topps Board, you and one of your
fellow dissident directors each approved the retention of Willkie Farr &
Gallagher to render independent judgment in connection with transaction
negotiations. Why then would you now question their independence but for
promoting your own agenda?
We will continue to act in the best interest of all stockholders and
remain focused on maximizing stockholder value.
/s/ Arthur T. Shorin
Chairman and Chief Executive Officer
Ajdler’s response Monday:
"You like to repeat that Crescendo wants to take over Topps without paying stockholders for their shares. Once again, you are misleading your stockholders. When a buyer wants to take a company private, as Mr. Eisner and Madison Dearborn are attempting to do, the buyer pays stockholders a premium for their shares. While this premium is typically 20 to 30%, you have approved a transaction that would pay stockholders a meager 3% premium and a significant discount to where the shares are currently trading. As you well know, Crescendo is NOT trying to take the Company 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.
As detailed in our proxy statement, we believe that the Company could be worth conservatively between $16 and $18 per share if managed properly. The concept that Crescendo is trying to take over Topps without paying stockholders for their shares is simply ludicrous and irrelevant since the Company would remain public and since any actions that the new slate would take to maximize stockholder value would benefit all of the Company’s stockholders, not just Crescendo.