Michael Eisner Company to Acquire Topps?

Posted on April 5, 2007

Topps BusinessWeek reports that former Disney CEO Michael Eisner's investment firm, The Tornante Company, and Madison Dearborn Partners plan to acquire Topps, the makers of baseball cards and Bazooka bubble gum.
"Over the past two years, with the assistance of Lehman Brothers, we've tried to examine all our opportunities and no other superior proposal has emerged in this time frame," said a spokeswoman from Topps. "In our opinion, the idea suggested by the dissidents [shareholder activists] would not result in greater value for stockholders."

Topps CEO Arthur T. Shorin is under pressure from shareholders who have agitated for change. In the summer, the hedge funds Crescendo Partners and Pembridge Capital got their respective people -- Arnaud Ajdler, Timothy Brog, and John J. Jones -- onto Topps' board, at the same time the company agreed to expand the number of board seats from nine to ten.

Now when the board voted on the offer from Eisner, only Topps' three new members opposed. Crescendo's director Arnaud Ajdler promised to campaign against the deal in a Mar. 6 letter to Topps board, criticizing them for not shopping the company around and for agreeing to sell at less than fair value.
If the deal is completed the new owners plan to take the company private. Topps is currently a publicly traded company.

A press release from Topps suggests that the Tornante acquisition may not occur. It says Topps has received an unsolicited indication of interest from The Upper Deck Company, a competing card publisher. It also states that the "Topps Board has not withdrawn, qualified, modified, changed or amended its recommendation with respect to The Tornante Company LLC and Madison Dearborn Partners, LLC merger agreement."