Tuesday, September 18, 2007
In advance of the Topps shareholder meeting tomorrow, Michael Eisner's Tornante and Madison Dearborn issued a helpful press release entitled "Tornante and Madison Dearborn Will Not Raise Price for Topps Company Group Reiterates Final Price Prior to Wednesday’s Shareholder Vote". In it they state that:
Topps is a wonderful company with a rich history, and we are prepared to buy it at the price of $9.75 per share set forth in our agreement. We thoroughly analyzed the value of Topps prior to entering into our deal with the company in March. We believed $9.75 per share was more than a full and fair price for the company then, and we continue to believe that to be the case now especially considering the current economic environment. If Topps shareholders feel differently and vote against our deal this week, we wish them well, but our price is final and we will not increase it.
The statement comes on the heels of the recommendations by ISS, Glass, Lewis and Proxy Governance, Inc. that shareholders reject Eisner's merger proposal. The ISS one is particular was interesting as it rested in part on the fact that "the original sales process exhibited something less than M&A 'best practices,' an opinion apparently shared by the Delaware courts." ISS's focus on these issues for its recommendations is admirable.
Topps had previously postponed its meeting based on VC Strine's recently issued decision in Mercier, et al. v. Inter-Tel, upholding the Inter-Tel's board's decision to postpone a shareholder meeting in circumstances of almost certain defeat. It appears that the postponement still hasn't done Topps much good and the shareholders are likely to still vote down this transaction.
Ultimately, the Topps board has done a disservice to its shareholders -- it has run this process in a biased manner, raised questions with respect to its dealings with Upper Deck, and been chastised in Delaware court for its failings in In Re Topps Shareholder Litigation. A no vote will likely lead to a subsequent proxy contest by Crescendo Partners to remove the board members who supported this transaction. In the meantime, under the merger agreement, Eisner would walk away with a payment of up to $4.5 million as reimbursement for his expenses.
The Topps meeting is tomorrow, September 19, 2007 at 11:00 a.m., local time, at Topps' executive offices located at One Whitehall Street, New York, NY 10004. If anyone attends and has some interesting information please let me know and I will post it. Perhaps Topps will even give out souvenir cards -- shareholders would then at least have something to show for the deal.