Monday, August 13, 2007
On Friday late afternoon, The Upper Deck Company announced that it was extending its tender offer for all outstanding shares of The Topps Company, Inc. until 12:00 midnight, New York City time, on August 29, 2007. Upper Deck also announced that, as of August 10, 11,829,601 shares had been tendered into the offer constituting 30.52% of the outstanding shares.
The extension is a sign of the seriousness of Upper Deck's offer. Nonetheless, the bad blood by the parties is still an obstacle towards finalizing a transaction. The parties are also fighting over the transaction structure, between merger or tender offer. Upper Deck has asserted that it has committed financing but expressed a preference for a merger transaction over its current tender offer in order to permit additional time to consummate its necessary financing. But a perusal of their commitment letter shows that it contemplates either a singe or two-step structure. Moreover, the Material Adverse Change clause which provides an out to the bank lenders specifically excludes "changes in the economy or financial markets generally", and states the MAC must effect Upper Deck, not the ability of the lenders to finance credit in the market. It would thus appear that there is no financing obstacle for Upper Deck to proceed with the tender offer route if it wishes, and that it can force its lenders to do so. Upper Deck's position is thus puzzling, and while their extension of the offer is a sign of their intentions, their other conduct still raises concern over whether an agreement will be reached between the parties.