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 April 19, 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:
April 19, 2007
BY EMAIL AND FACSIMILE
Board of Directors of The Topps Company, Inc.
c/o Mr. Steven Gartner
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Dear Fellow Members of the Board:
I have reviewed the preliminary proxy statement (the "Merger Proxy") filed
by The Topps Company, Inc. ("Topps" or the "Company") on April 17, 2007. The
fact that the Topps Board did not solicit comments from Timothy Brog, John Jones
or me (the "Objecting Directors") or even make available to us drafts of the
Merger Proxy before filing it with the SEC is unjustifiable and is another
example of the Topps Board's disregard for its stockholders' representatives and
basic corporate governance.
As a fiduciary, it is therefore my duty to set forth for the stockholders
the omitted part of the story, which certain other members of the Topps Board
apparently do not want the Company's stockholders to know.
Set forth below are just a few of the many "half-truths" that you have
presented in the Merger Proxy:
o THE HALF-TRUTH REGARDING BIDDER C: You do not make clear that at the April
16, 2007 Board meeting, I was the director who voted in favor of declaring
Bidder C an "excluded party," a determination required by the Board under the
Merger Agreement in order for the Board to continue negotiations and
discussions with a bidder following the end of the "go-shop" period. You also
fail to mention in the Merger Proxy that I favored a declaration of Bidder C
as an "excluded party" for the following reasons: (1) the proposed purchase
price was $1 more per share, (2) the proposal was not contingent on
financing, (3) the amount of liquidity in the financial system is at an
unprecedented level and it would be highly unlikely that Bidder C would not
get financing for this transaction, (4) Bidder C made concessions regarding
the deal terms, (5) this deal would be highly strategic for Bidder C and (6)
there would be potential of creating deal tension between the bidders to
maximize stockholder value.
o THE HALF-TRUTH REGARDING THE RECOMMENDATION OF STRATEGIC ALTERNATIVES: You
have made several incomplete statements in the Merger Proxy regarding the
Objecting Directors' analysis and recommendations regarding strategic
alternatives to maximize stockholder value. First, you mischaracterized the
Objecting Directors' recommendation of a special dividend over a large share
buyback at a meeting of the Topps Board. You state in the Merger Proxy that
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the Objecting Directors "unanimously recommended the payment of a special
dividend because, among other things, in the second committee's view, `Topps'
stock price is not materially undervalued to its intrinsic value,' and `the
stock is not particularly cheap.'" What you conveniently fail to mention,
however, is that the Objecting Directors expressly stated that their
valuation considerations assumed the continued employment of certain members
of senior management. If you had provided the complete story, the quote of
the Objecting Directors in the Merger Proxy would have read something like:
"With existing senior management in place, the stock is not particularly
cheap and we therefore recommend the payment of a special dividend; however,
were certain members of senior management to be replaced, the stock would be
significantly undervalued and we would advocate a large share buyback." You
fail to mention that on several occasions I recommended a large share buyback
instead of a special dividend were the Company to replace certain members of
senior management.
You also conveniently fail to disclose that the most recent stock repurchase
program that was approved by the Board - prior to the election of Mr. Brog,
Mr. Jones and me - had a top price of $10.62 per share. I do not understand
how management and the Topps Board on the one hand can recommend buying
shares up to $10.62 per share, but on the other hand approve the sale of the
Company at $9.75 per share as the alternative that maximizes stockholder
value, particularly given the improvements in the Company's financial
performance in the first three quarters of fiscal year 2007.
o THE HALF-TRUTH REGARDING MANAGEMENT'S "ADJUSTED CASE" PROJECTIONS: You
conveniently fail to mention in the Merger Proxy that the "adjusted case"
projections prepared by management and used by Lehman Brothers in its
fairness analysis appeared for the first time only on January 25, 2007, after
the $9.75 price had been determined. Before that time, the Topps Board had
seen and worked only with the "management" projections. Without the "adjusted
case" projections which significantly reduced the "management" projections
previously provided to the Topps Board, the Proposed Merger would clearly not
be within the range of fairness of the discounted cash flow analysis.
If the Proposed Merger is consummated, Madison Dearborn and Tornante will
stand to reap the benefits of the Company's initial strategic turnaround
results, as opposed to the long-term stockholders who have waited patiently
through years of poor operating and stock performance under the current
management team for the underlying value of their shares to be unlocked.
o THE HALF-TRUTH REGARDING THE COMPANY'S SALE PROCESS: In the days following
the announcement of the Proposed Merger, a Company spokeswoman made comments
to the press suggesting that the Company had been actively soliciting bids
for the sale of the Company for the past two years. The Company spokeswoman
was quoted in a news article as stating the following:
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"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."
I reiterate my belief expressed in my March 14 letter to the Board that this
statement is incomplete because it gives the incorrect impression that Topps
was shopped or that alternative proposals were solicited before entering into
a merger agreement at $9.75. The Merger Proxy indicates that the Company only
talked to 3 financial buyers (Bidder A, Bidder B, and Tornante) before
entering into a deal with Tornante. The Merger Proxy also makes it clear that
Topps never approached Bidder C, its main competitor for its entertainment
division, to see if it had an interest in buying the Company. The Merger
Proxy also does not mention that Bidder C had expressed interest in pursuing
a transaction with Topps even before the announcement of a transaction with
Madison Dearborn and Tornante.
o THE HALF-TRUTH REGARDING MY OPPOSITION TO THE PROPOSED MERGER: You continue
to mischaracterize my opposition to the Proposed Merger. The Merger Proxy
states that "Messrs. Brog and Ajdler indicated, among other things, that they
opposed the transaction because there was not, in their view, a full auction
of the Company." You conveniently omit that my opposition to the deal first
and foremost stems from the fact that the price is inadequate. At a mere 3%
premium based on the average closing prices of the 20 trading days preceding
the signing of the Merger Agreement, this buyout is not in the best interest
of the Company's stockholders and it does not maximize stockholder value.
I reiterate my position that the existing Proposed Merger is not in the best
interest of the Company's stockholders because the per share merger
consideration is wholly inadequate and does not provide full and fair value to
the Company's stockholders.
Regards,
/s/ Arnaud Ajdler
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Arnaud Ajdler
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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
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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