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With pressure from shareholders waging a proxy fight, Topps Co. is considering the sale of its candy unit.
Topps hired Lehman Brothers earlier this year to evaluate strategic alternatives, including a sale of the confectionery business, which includes Bazooka bubble gum. The sale would not include its collectibles business, which includes baseball cards.
The announcement followed calls by minority shareholder Pembridge Capital Management to elect three new board members who would consider selling all or part of the company. The Manhattan-based hedge fund said Topp's operating performance and declining stock price have slid over the past five years, while executives have been paid “egregious” salaries and bonuses, according to a report in Crain's New York Business.
Topps' annual net income has declined 81 percent to $11 million in the past five years, while sales have dropped 21 percent to $295.9 million.
Separately, the company agreed to pay $2 million to Media Technologies Inc., settling a four-year-old patent infringement suit. Santa Monica, Calif.-based Media Technologies had sued Topps and nine other trading card manufacturers in 2001, claiming the companies stole its idea for selling cards that incorporated a piece of sports equipment or jersey as part of the design, according to the magazine.