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
THE COMMITTEE TO ENHANCE TOPPS
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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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The Committee to Enhance Topps ("the Committee"), 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"). On
April 26, 2007, the Committee filed a PRELIMINARY proxy statement with the SEC
with regard to the Stockholders Meeting.
Item 1: On April 26, 2007, the Committee issued the following press
release:
FOR IMMEDIATE RELEASE
THE COMMITTEE TO ENHANCE TOPPS FILES PRELIMINARY PROXY
MATERIALS WITH THE SEC
Delivers Letter to Topps Stockholders Expressing its Strong Opposition to the
'Inadequate' Proposed Offer
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NEW YORK, NY - APRIL 26, 2007 - The Committee to Enhance Topps announced today
that it has filed preliminary proxy materials with the Securities and Exchange
Commission in connection with the solicitation of proxies against a proposed
merger between The Topps Company, Inc. (NASD:TOPP) 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 special meeting of Topps
stockholders. In addition, the Committee announced that it has delivered a
letter to Topps stockholders expressing its strong opposition to the proposed
offer.
Full text of the letter follows:
THE COMMITTEE TO ENHANCE TOPPS
April 26, 2007
Dear Fellow Topps Stockholder:
The Committee to Enhance Topps (the "Committee") is a significant
stockholder of The Topps Company, Inc. ("Topps"), owning approximately 6.6% of
its outstanding common stock. We are writing to our fellow stockholders because
Topps has entered into an ill-advised agreement to be acquired by entities
controlled by Michael D. Eisner and Madison Dearborn Partners, LLC at a price of
$9.75 per share. We are strongly opposed to the acquisition of Topps because,
among other things, the proposed price to be paid for your Topps shares is
inadequate and there are better choices available for maximizing stockholder
value.
THE COMMITTEE STRONGLY OPPOSES THE INADEQUATE $9.75 PROPOSED OFFER
We believe that the proposed acquisition is not in the best interest of
Topps stockholders. We are strongly opposed to this transaction. Consider the
following:
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1) THE $9.75 PER SHARE MERGER CONSIDERATION PROPOSED TO BE PAID BY MR. EISNER
AND HIS PARTNERS TO THE COMPANY'S STOCKHOLDERS IS INADEQUATE. IT DOES NOT
FULLY REFLECT THE INTRINSIC VALUE OF YOUR COMPANY'S SHARES.
o The price presents only a Mickey Mouse-like 3% premium to the average
closing price of Topps' shares for the 20-trading days preceding the
signing of the merger agreement.
o Since the date the merger agreement was signed, the Company's stock has
been consistently trading at prices higher than the proposed $9.75 per
share offer price, trading as high as $10.17 on April 19, 2007.
o The Company fails to tell you that the most recent proposed stock
repurchase program that was approved by the Topps Board for the period
September 2005 through September 2006 had a top price of $10.62 per
share. The Committee does 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, particularly given the improvements in the Company's
financial performance in the first three quarters of fiscal year 2007.
2) A BETTER ALTERNATIVE EXISTS FOR MAXIMIZING STOCKHOLDER VALUE.
o If the merger is voted down, we intend to nominate a slate of highly
qualified business executives to replace the members of the existing
Topps Board. Our nominees will be dedicated to acting in the best
interest of all Topps stockholders and will take all necessary steps to
maximize stockholder value.
o As a first step, we would recommend a modified "Dutch Auction" tender
offer be conducted to buy back $110 million of shares between $10.00 to
$10.50 per share. Such a tender offer would have multiple advantages,
which include (i) fixing the capital structure by placing a limited
amount of debt on the Company, (ii) providing current liquidity to
investors at a higher price per share than the proposed merger and
(iii) providing long-term stockholders the ability to participate in
the Company's future growth in a more levered way.
o We believe that the Company should hire a new CEO with extensive
marketing and turnaround experience, and who would bring a fresh
perspective to the organization in order to improve the operations of
the Company. It is time to end the nepotism at Topps, which we believe
is the driving force behind senior management's failure to take
advantage of new business opportunities.
o The Company has just started to reap the benefits of its turnaround
plan. Why let Mr. Eisner and his cohorts receive the benefits of the
wide range of business opportunities available to the Company? It is
time to stop private equity firms from taking value away from public
stockholders!
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3) THE PROCESS THAT LED TO THE SIGNING OF THE MERGER AGREEMENT WAS FLAWED.
o The Topps Board did not shop the Company prior to signing the Merger
Agreement and thus failed to maximize the competitive dynamics of a
sale transaction that could have garnered the highest price possible
for the Company.
4) THE DEAL-PROTECTION TERMS OF THE "GO-SHOP" PROVISION UNDER THE MERGER
AGREEMENT DO NOT PROVIDE FOR A SUFFICIENT, POST-SIGNING MARKET CHECK.
o The Committee believes that the terms of the "go-shop" provision under
the merger agreement were designed to deter rather than encourage the
solicitation of alternative proposals. Therefore, we believe that any
implication by the Company that contacting more than 100 companies
during the "go-shop" period provides for a substantial post-signing
market check is a `smokescreen.'
o You should know that the Topps Board ceased negotiations and
discussions with a potential bidder that had offered to pay $10.75 per
share, a 10.3% premium to Eisner's inadequate offer. The Company ceased
negotiations and discussions with the bidder using as a convenient
excuse the restrictive "go-shop" provision in the merger agreement.
This does not appear to the Committee to be an effective post-signing
market check.
NOT ONLY DOES THE $9.75 OFFER PRICE FALL SHORT,
BUT SO DOES THE PROCESS UTILIZED IN ARRIVING AT THE PRICE.
Because the Topps Board failed to maximize value for all Topps
stockholders, on April 26, 2007, we filed preliminary proxy materials with the
Securities and Exchange Commission to formally oppose the merger proposal and
Eisner's Uncle Scrooge-like offer. We are not seeking your proxy at this time,
but after we file our definitive proxy material, we will be sending you our
proxy statement and GOLD proxy card. If you receive Topps' white proxy card,
please do not vote the white proxy until you have had a chance to review our
solicitation materials.
If you have any questions, please feel free to call us directly at
(212) 319-7676. You may also call D.F. King & Co., Inc., which is assisting
the Committee, toll-free at (800) 628-8532.
Sincerely yours,
Eric Rosenfeld & Arnaud Ajdler
The Committee to Enhance Topps
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
The Committee to Enhance Topps (the "Committee"), together with the other
participants named herein, has made 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.
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THE COMMITTEE 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, Arnaud Ajdler and The Committee to
Enhance Topps (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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