Topps Shareholders OK $384.4M Takeover
Wednesday, September 19, 2007; 6:46 PM
NEW YORK -- The Topps Co.'s shareholders approved a $385.4 million private equity takeover of the baseball card and Ring Pop candy maker, the company said Wednesday, defeating activist investors who had said the price was too low.
CEO Arthur Shorin told shareholders the deal had enough preliminary votes to pass at the end of a special meeting. The meeting had been postponed three times as the company sought the votes it needed.
Michael Eisner's Tornante Co. investment firm and Madison Dearborn Partners LLC agreed in March to take the company private for $9.75 a share. Since then they have had to fight two of the company's board members and a Topps competitor to gain the confidence of shareholders. Eisner is a former chief executive of The Walt Disney Co.
"I look forward to working with my new associates at Topps to find new and exciting ways to grow the company," Eisner said in a statement. "Topps is a wonderful company with a portfolio of strong brands."
A majority of the company's 38.76 million outstanding shares had to be voted in favor of the deal for it to go through.
Shorin did not give an exact vote count, but a spokesman said that would be released within 10 days.
The deal had been in limbo since it was first announced.
Two Topps board members who represent hedge funds opposed it while The Upper Deck Co., Topps' only rival in the baseball card market, made a hostile $10.75 per share bid in May only to withdraw it a few months later.
Concern over the industry's growth prospects and uncertainty about consumer spending trends made the all-cash offer more attractive, Morgan Joseph & Co. analyst Jeff Blaeser said.
Blaeser said shareholders may have been swayed on Tuesday when a major shareholder, Mario Gabelli, said he would vote his funds' shares in favor of accepting the deal. Gabelli increased his stake in the company to 8.49 percent from roughly 7 percent, according to a regulatory filing Wednesday.
The deal is expected to close in October.
Timothy Brog, a director of Topps and portfolio manager of Pembridge Capital Management LLC who has opposed the buyout, said before the announcement that the company was improperly using the delays to gather more votes.
"They are doing everything they can in their power to hijack corporate democracy," he said.
A Topps spokesman responded that the delay gave shareholders the time they needed to decide what to do. Topps has said the Eisner deal was its best option and that it was the only real prospect out of more than 100 potential buyers who were contacted.
The shareholder approval is a defeat for Brog and fellow board member Arnaud Ajdler, managing partner of hedge fund Crescendo Partners, which owns about 6 percent of Topps.
Topps shares rose 36 cents to $9.61 Wednesday.