UD bids $416m for Topps

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NEW YORK - The Upper Deck Co. has made a pitch to buy The Topps Co., a bid that would join two iconic baseball card makers that have sold sports memorabilia to generations of fans young and old.


The offer price of $10.75 a share trumps a bid earlier this year from a group of investors led by former Disney CEO Michael Eisner. Topps, maker of baseball cards and Bazooka bubble gum, said Thursday it was not sure Upper Deck's bid is a superior offer.

Eisner's Tornante Co. LLC and the Chicago-based private equity firm Madison Dearborn Partners LLC had agreed to pay $9.75 a share, which represented a premium of 9.4 percent when they first made the offer in early March. That deal received regulatory approval on April 3 and has been scheduled for a shareholder vote on June 28.

The group led by Eisner agreed to let New York-based Topps negotiate with Upper Deck, which is in Carlsbad, Calif.

Topps, founded in 1938, makes trading cards that feature athletes of Major League Baseball, the NFL and NBA. In addition to Bazooka bubble gum, it owns the Ring Pop and Push Pop brands and makes sticker album collections.

The Eisner-led deal had been opposed by three out of 10 Topps board members and the investment firm Crescendo Partners II. Crescendo managing partner Arnaud Ajdler has a seat on Topps' board and had argued that the deal undervalued the company after a "flawed" negotiation process.

Eric Rosenfeld of Crescendo — who with Ajdler leads The Committee to Enhance Topps — said Thursday that the firm was reviewing the proposal from Upper Deck.

Upper Deck had originally expressed interest during a 40-day "go shop" period that ended April 14. It has now submitted a new "highly confident" letter from an unnamed commercial bank. Topps said it had been concerned about Upper Deck's ability to finance the deal, as well as its insistence on limiting its liability if antitrust regu5lators do not approve the deal.

A call to Upper Deck was not immediately returned.

Eisner was CEO of The Walt Disney Co. for two decades until 2005. Disney owns theme parks, movie studios and the ABC, ESPN and Disney TV networks.

Shares of Topps rallied 45 cents on the news, nearly 5 percent, to $10.23 in midday trading Thursday.
 
odjickfan said:
They really want the monopoly.

Next step will be to buy Donruss, and the other cards maker, and get the exclusive in every sport.
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What business wouldn't want a monopoly if they could pull it off? Just remember, Topps was a monopoly for about 30 years before Fleer and Donruss came along in 1980. Consolidation of industries in the last year or so is quickly becoming the norm right now, especially if you are invested in the Canadian markets right now. So it should come hardly as a surprise that it's carrying over to our little corner of the world too.

I'm not keen on it by any stretch, but it's just part and parcel of the business cycle - and consolidation of this industry has been underway for the last few years after the huge expansion of the 80s and 90s.
 
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Steve, I'm talking about the monopoly they had in baseball from 1950-1980. That is pretty much the period where nothing changed in the hobby for a very long time until Fleer and Donruss took them, the MLBPA and MLB to court to get a license. That is the watershed moment for the hobby by and large
 
If UD attempts to hit a monopoly grand slam, don't you think the anti-trust investigation would heat up again as far as a monopoly goes? I think they'd be pputting themselves out there for trouble.

It'll be interesting to see where this goes.

Cory
 
Cory,

It might be interesting - as there are other producers still out there, albeit they are relatively small, it may be enough to avoid any antitrust charges.

The only way I can compare is to the NFL's situation. They know they are pretty much the only game in town, but with the CFL and the Arena League around, there is an option to play football elsewhere, which makes any antitrust claim a moot point.
 
Hama said:
Cory,

It might be interesting - as there are other producers still out there, albeit they are relatively small, it may be enough to avoid any antitrust charges.

The only way I can compare is to the NFL's situation. They know they are pretty much the only game in town, but with the CFL and the Arena League around, there is an option to play football elsewhere, which makes any antitrust claim a moot point.
Click to expand...

It all comes down to how the market is perceived; is the card market on its own enough to trigger it, or would the entire merchandising market be taken into account?

If the card market on its own is enough, but the licensors (NHL, NBA, MLB, etc.) choose only to deal with one company, would there even be an investigation?

I still think if Topps bails out, it'll be to Disney anyway.

Cory
 
Nooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 
What does Topps care about anti-trust? They just want the most per share they can get, and let UD deal with that side of it. They have two bona fide offers on the table, so they take the high one from UD, UD deals with anti-trust (which, even if it is questioned, will win - see below) and the shareholders get more $$. This is simply all about the money...

Why I think there won't be an anti-trust investigation - UD will claim that there are huge card companies other than the joint UD-Topps company, such as Donruss, ITG plus all the non-sports card companies like Rittenhouse, Inkworks, Benchwarmer, etc... they'll say there's lots of competition, regardless of how big the new company would be.
 

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