You are here
The Topps Co. has filed with the Securities and Exchange Commission, and mailed to all Topps stockholders, its definitive proxy materials, as its CEO urged stockholders to vote for the previously announced agreement to be acquired by The Tornante Co. LLC and Madison Dearborn Partners, LLC.
Under the agreement, Topps stockholders will receive $9.75 per share in cash, a 21-percent premium over unaffected stock price, for a total transaction value of approximately $385.4 million.
In the letter to stockholders, Chairman and CEO Arthur T. Shorin noted Topps' board of directors evaluated the company's alternatives over a number of years and pursued a wide range of possibilities prior to entering into the transaction.
The company conducted a sale process for the confectionery business in 2005, with an eye toward doing the same with the entertainment business if the process was successful. No reasonable offers emerged for the confectionery business and the process was terminated, Shorin said.
Topps received and evaluated several unsolicited acquisition proposals in the second calendar quarter of 2006, before the board decided to negotiate with Tornante - Madison Dearborn, he noted.
Over the past two years, two hedge funds, Pembridge and Crescendo, which are represented on Topps' board by "objecting directors," have strongly advocated for a sale of the company. "Incredibly," Shorin told stockholders, "now Crescendo has publicly revealed its true objective: 'kill the transaction' and take control of Topps without paying you for your shares in the company.
"Crescendo plans to run a third proxy contest to replace the Topps board with undisclosed nominees, and then replace your management team with an undisclosed management team," he said in the letter. "We believe Crescendo's motives are self-serving and not in the best interest of all Topps stockholders."
In recent years, Topps was reorganized into two businesses -- confectionery and entertainment --to better compete in its highly competitive industries. Management renegotiated agreements with Major League Baseball and Major League Baseball Players Association, resulting in a reduction of licensees from 4 to 2, a reduction in total industry releases from 95 to 40 and an increase in Topps share of releases from 30 percent to 50 percent.
The company also developed high-end products for the serious collector and relocated Bazooka to a lower-cost supplier and began to rebuild the brand, Shorin noted.
After restructuring the candy new product development team, it rationalized SKUs to reduce complexity and lower costs.
A special meeting of Topps stockholders to consider and vote on the proposed merger agreement has been scheduled for June 28, 2007.