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)
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/X/ No fee required.
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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/_/ Fee paid previously with preliminary materials:
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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 8, 2007, the following news story was issued by The Deal:
Topps director: Holders unhappy
by David Shabelman (MAILTO:DSHABELMAN@THEDEAL.COM)
Updated 05:52 PM EST, Mar-8-2007
Although dissident investors in Topps Co. succeeded last year in gaining
representation on the company's board of directors, they may be hard-pressed to
derail a $371 million buyout offer from former Walt Disney Co. head Michael
Eisner and private equity firm Madison Dearborn Partners LLC. Eisner's
investment vehicle, the Tornante Company LLC of Hollywood, Calif., and Madison
Dearborn of Chicago agreed Tuesday, March 6, to pay $9.75 a share for the New
York-based confectioner and trading card maker. The offer price drew immediate
criticism from hedge fund Crescendo Partners LLC, which last year staged a proxy
fight against Topps.
"I think shareholders are very unhappy with this deal," Arnaud Ajdler, managing
director at New York-based Crescendo and a director at Topps, said in an
interview. "All the shareholders I've talked with are unhappy. The company was
not shopped, and they're unhappy about the price." Crescendo, along with New
York hedge fund Pembridge Capital Management LLC, secured three seats on Topps'
board last summer after reaching an agreement with the company that also allowed
CEO Arthur Shorin to keep his position as chairman on the panel.
But the investors, which combined own a 7.1% stake in Topps, could struggle to
rally enough shareholders to block the deal. The company's largest investor is
Private Capital Management Inc., a Naples, Fla., investment firm with a 7.8%
stake as of Dec. 31. Crescendo is the next largest holder with 6.6%, followed by
Dimensional Fund Advisors Inc., with 6.5%. Shorin owns roughly 6% of Topps
shares.
"My gut feeling is it's going to be an uphill battle for them simply because the
existing shareholders may not see the fight worth the potential gain," said Jeff
Blaeser, an analyst with Morgan Joseph & Co. "Most investors probably think the
offer price is a little too low for them, but maybe they can take their profits
and move on to something else."
At $9.75 a share, the offer price represents a 9.4% premium to Topps's closing
share price on Monday of $8.91, but only a 3% premium to its average closing
price in the prior 20 trading sessions.
On Wednesday, shares continued to trade above the offer price at $9.90,
suggesting investors expect a rival bid or that Eisner and Madison Dearborn
could sweeten their offer.
Ajdler said Topps can maximize its value by shopping each of its two divisions
separately. Alternatively, he said the company could remain public and "return
cash to shareholders, leverage the balance sheet and cut costs for the benefit
of the shareholders instead of selling on the cheap to the private equity guys."
A Topps spokeswoman rejected the idea of breaking Topps apart to sell its assets
separately. "Over the past two years, with the assistance of Lehman Brothers
Inc., we have examined all opportunities to deliver value to Topps stockholders,
and no other superior proposals have emerged in this time frame," she said. "The
board intends to do everything possible to see if, over the next 40 days, a
superior proposal exists."
Ajdler said that if shareholders reject the deal, he plans to nominate
additional candidates for the company's board in an effort to gain a majority.
"At this point, we want to kill the deal, take the company over, improve the
margins and create value, and then possibly sell the company," he said.
Blaeser, who values Topps at $11 per share, or roughly $419 million, said he
does not expect other prospective buyers to surpass the bid from Eisner and
Madison Dearborn. He said private equity firms are often reluctant to enter a
bidding war with other buyout shops, while there are no obvious bidders that
might want Topps's combination of businesses.
The company's entertainment unit makes sports and other trading cards, while its
confections division sells lollipops and Bazooka Joe bubble gum. For the first
nine months of its fiscal 2007, ending Nov. 25, 2006, Topps reported net income
of $8.7 million on revenue of $242 million compared with net income of $2.1
million on revenue of $226.3 million for the year-ago period.
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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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