sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. )
Filed by the Registrant /_/
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/X/ Soliciting Material Under Rule 14a-12
THE TOPPS COMPANY, INC.
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(Name of Registrant as Specified in Its Charter)
CRESCENDO PARTNERS II L.P., SERIES Y
CRESCENDO INVESTMENTS II, LLC
CRESCENDO ADVISORS LLC
ERIC ROSENFELD
ARNAUD AJDLER
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/_/ Fee paid previously with preliminary materials:
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/_/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Crescendo Partners II, L.P., Series Y ("Crescendo Partners II"), together
with the other participants named herein, is filing materials contained in this
Schedule 14A with the Securities and Exchange Commission ("SEC") in connection
with the solicitation of proxies against a proposed merger between The Topps
Company, Inc. (the "Company") and a buyout group that includes Madison Dearborn
Partners, LLC and an investment firm controlled by Michael Eisner, which will be
voted on at a meeting of the Company's stockholders (the "Stockholders
Meeting"). Crescendo Partners II has not yet filed a proxy statement with the
SEC with regard to the Stockholders Meeting.
Item 1: On March 6, 2007, Arnaud Ajdler, a director of the Company and a
managing director of Crescendo Partners II, delivered the following letter to
the other members of the Company's Board of Directors:
March 6, 2007
BY EMAIL AND FACSIMILE
Board of Directors of The Topps Company, Inc.
c/o Ms. Holly K. Youngwood
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Dear Fellow Members of the Board:
I am writing to you to express my thoughts regarding the Agreement and Plan of
Merger, dated March 5, 2007 (the "Merger Agreement") that The Topps Company,
Inc. (the "Company") entered into with certain entities controlled by Michael D.
Eisner and Madison Dearborn Partners (the "Buyers"). I voted against the Merger
Agreement when it was submitted to a vote of the Company's Board of Directors
because I believe that the proposed buyout is not in the best interests of the
Company's shareholders and does not maximize shareholder value.
The merger consideration, in my belief, represents a discount to the fair value
of the Company and is inadequate. Furthermore, I believe that the process that
led to the signing of the Merger Agreement was flawed in that the Board of
Directors did not shop the Company and thus failed to maximize the competitive
dynamics of a sale transaction that would have garnered the highest price
available. Instead of selling the Company for a premium of approximately 3%(1),
the Board could have taken steps similar to those that are likely to be taken by
the private equity buyers of the Company. As I have suggested on numerous
occasions, the Company could return excess cash to shareholders, leverage its
balance sheet, strengthen management, cut costs more aggressively and continue
to grow the business for the benefit of the public shareholders.
As directors, we have fiduciary obligations to the Company and its shareholders
to ensure that the Company takes all appropriate steps to maximize shareholder
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(1) Based on the average closing prices of the last 20 trading days
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value. In accordance with my fiduciary duties as a director of the Company, it
is incumbent upon me to take any actions that I believe are necessary to prevent
the consummation of a transaction that does not provide full and fair value to
the Company's shareholders.
Since the Board of Directors has decided to pursue this transaction over the
significant concerns which I have continually and repeatedly voiced to the
Board, I intend to actively solicit votes and campaign against the proposed
transaction. I will do this together with Crescendo Partners II, L.P., Series Y,
a large shareholder of the Company of which I am a Managing Director.
Very Truly Yours,
/s/ Arnaud Ajdler
Director
Item 2: On March 6, 2007, the following news story was issued by
Bloomberg:
Topps to Be Bought by Eisner Group for $385.4 Million
By Chris Dolmetsch
March 6 (Bloomberg) -- Topps Co., the maker of baseball trading cards and
Bazooka bubble gum, agreed to be acquired for $385.4 million by
private-equity investors including former Walt Disney Co. Chief Executive
Officer Michael Eisner.
Eisner's Tornante Co. and Madison Dearborn Partners LLC will pay $9.75 a
share in cash, New York-based Topps said today in a statement.
Eisner may be in for a battle with shareholders over the price, which is 9.4
percent above yesterday's close. Three directors, also among the largest
shareholders, opposed the transaction, because it would hand over control of the
69-year- old company just as it begins to generate profit growth.
"The company was in the early innings of improving their operations," said James
Barrett, an analyst at CL King & Associates in New York. "If they in fact
improved their operations, specifically the confectionary business, the company
would have commanded a much higher takeout price than was offered this morning."
Barrett has an "accumulate" rating on Topps shares.
Shares of Topps rose 92 cents, or 10 percent, to $9.83 at 1:33 p.m. in Nasdaq
Stock Market composite trading, indicating investors may be anticipating a
higher offer. Earlier, they traded as high as $9.99, the biggest jump in 12 1/2
years. Before today, they had risen 12 percent in the past year.
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Voted Against
Topps was founded by the Shorin brothers in 1938 as a chewing gum maker and
developed its trademark Bazooka gum after World War II. In 1950, the company
began selling trading cards, adding baseball cards in 1951 and introducing the
Bazooka Joe character in 1953.
The company expanded its offering of the cards, which can be swapped or sold by
collectors, and now sells "Star Wars" and wrestling cards. Some of its baseball
cards now fetch thousands of dollars, with the 1952 Mickey Mantle card its most
valuable. Arthur Shorin, whose father and uncles started the business, is CEO of
the company and his son-in-law, Scott Silverstein, is president.
Three of the company's 10 directors, Arnaud Ajdler, Timothy Brog and John Jones,
voted against the purchase, according to a filing with the Securities and
Exchange Commission.
Ajdler, Brog and Jones were named to the board in July after they criticized
management compensation and agitated for changes. Ajdler said he will campaign
against the deal.
"We think that the $9.75 is not a fair price," Ajdler said in a telephone
interview today. Ajdler's Crescendo Partners II is the company's second-largest
shareholder with about 6.6 percent of the stock. "We think the company's worth
more. It was a flawed process."
Job Cuts
Eisner had no comment beyond today's statement, spokesman Robert Zimmerman said.
Topps spokeswoman Sharon Stern had no immediate comment.
Eisner, who founded Tornante in 2005 after leaving Disney, and Madison Dearborn,
a Chicago-based private equity firm, are seeking to capitalize on the company's
anticipated profit growth.
In January, Topps said it may exceed its fiscal 2007 profit forecast, buoyed by
sales of U.S. sports cards and new candy products. The company cut 17 percent of
its workforce six months ago to help boost profit.
Net income has fallen in each of the past five years, and the company in
September 2005 ended an effort to sell the confectionary business after
potential buyers didn't show enough interest. The company is debt free.
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Difficulty Competing
It may make more sense for a larger confectionary company to buy Topps' candy
business, which includes Bazooka gum, Ring Pops and Push Pops, Bennett said.
"Topps as a standalone company had difficulty competing with the Wrigleys and
the Cadburys and Hersheys of the world," Bennett said. "I'm not sure how Michael
Eisner is going to change that, unless he plans on changing the confectionary
business and focusing on entertainment."
Eisner, who turns 65 tomorrow, stepped down from Burbank, California-based
Disney, the second-largest U.S. media company, in September 2005 after two
decades as CEO. He then founded Tornante to invest in media and entertainment
companies.
Topps would be his firm's biggest investment. Tornante, along with Spark Capital
and Time Warner Inc., invested $12.5 million in closely held Internet television
company Veoh Networks Inc. in April, and Tornante acquired Team Baby
Entertainment, which makes college sports DVDs for children, in June.
Lehman Brothers Holdings Inc. advised Topps and Willkie Farr & Gallagher LP
acted as legal adviser. Deutsche Bank was the financial adviser for Madison
Dearborn and Tornante. Hastings, Janofsky & Walker LLP was legal adviser to
Madison Dearborn and Munger, Tolles & Olson LLP advised Tornante.
Item 3: On March 6, 2007, the following news story was issued by
Market-Day:
Bazooka gum maker in sticky takeover
Posted on March 6, 2007
from Staff Reports
Baseball card and Bazooka bubble-gum maker Topps Co. said Tuesday it accepted
a $385.4 million takeover offer from a U.S. buyout group.
But the takeover by Tornante Co. and Madison Dearborn Partners, owned by former
Walt Disney Co. Chief Executive Michael Eisner, drew quick resistance from board
member and major shareholder Arnaud Ajdler.
Ajdler, managing partner of investment firm Crescendo Partners II, which owns
6.6 percent of Topps, said Eisner's offer undervalued the company. The
negotiations also did not go through proper channels, Ajdler said.
Ajdler voted against the deal but the Topps board approved it and said Tuesday
it would recommend Topps stockholders adopt it.
Eisner's $9.75-a-share offer represents a 9.4 percent premium over the stock's
$8.91 Monday closing price and is less than the stock's nearly $10 price
Tuesday.
The company said the takeover could close by September.
Topps, founded in 1938, makes sports trading cards, bubble gum and Ring Pop and
Push Pop lollipop brands.
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CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Crescendo Partners II, L.P., Series Y ("Crescendo Partners II"), together
with the other participants named herein, intends to make a preliminary filing
with the Securities and Exchange Commission ("SEC") of a proxy statement and an
accompanying proxy card to be used to solicit votes in connection with the
solicitation of proxies against a proposed merger between The Topps Company,
Inc. (the "Company") and a buyout group that includes Madison Dearborn Partners,
LLC and an investment firm controlled by Michael Eisner, which will be voted on
at a meeting of the Company's stockholders.
CRESCENDO PARTNERS II ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE
PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY
STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
THE PARTICIPANTS' PROXY SOLICITOR, D.F. KING & CO., INC., BY CALLING (800)
628-8532.
The participants in the proxy solicitation are Crescendo Partners II,
L.P., Series Y, a Delaware limited partnership ("Crescendo Partners II"),
Crescendo Investments II, LLC, a Delaware limited liability company ("Crescendo
Investments II"), Crescendo Advisors LLC, a Delaware limited liability company
("Crescendo Advisors"), Eric Rosenfeld and Arnaud Ajdler (the "Participants").
Crescendo Partners II beneficially owns 2,547,700 shares of Common Stock
of the Company. As the general partner of Crescendo Partners II, Crescendo
Investments II may be deemed to beneficially own the 2,547,700 shares of the
Company beneficially owned by Crescendo Partners II. Crescendo Advisors
beneficially owns 100 shares of the Company. Eric Rosenfeld may be deemed to
beneficially own 2,547,900 shares of the Company, consisting of 100 shares held
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by Eric Rosenfeld and Lisa Rosenfeld JTWROS, 2,547,700 shares Mr. Rosenfeld may
be deemed to beneficially own by virtue of his position as managing member of
Crescendo Investments II and 100 shares Mr. Rosenfeld may be deemed to
beneficially own by virtue of his position as managing member of Crescendo
Advisors.
Mr. Ajdler beneficially owns 2,301 shares of the Company.
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