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
/X/ Definitive Additional Materials
/_/ Soliciting Material Under Rule 14a-12
THE TOPPS COMPANY, INC.
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(Name of Registrant as Specified in Its Charter)
CRESCENDO ADVISORS LLC
CRESCENDO PARTNERS II L.P., SERIES Y
CRESCENDO PARTNERS III, L.P.
CRESCENDO INVESTMENTS III, LLC
CRESCENDO INVESTMENTS II, LLC
ERIC S. 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
Crescendo Partners II, L.P., Series Y has filed a definitive proxy
statement with the SEC in connection with the solicitation of proxies against a
proposed merger between The Topps Company, Inc. ("Topps") 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 the Company's
stockholders.
Item 1: On August 24, 2007, Arnaud Ajdler delivered the following letter
to Institutional Shareholder Services Inc.:
August 24, 2007
BY EMAIL AND FACSIMILE
Mr. Christopher Young
Institutional Shareholder Services
2099 Gaither Road
Rockville, MD 20850-4045
Dear Chris:
Topps just sent a letter to shareholders. I believe that the letter is
misleading and omits certain key facts. As a follow-up to our discussions, I
wanted to highlight certain of these issues.
1. Topps focuses on the multiple of 2007 EBITDA but fails to mention that the
multiple based on 2008 EBITDA is significantly lower. Past margins are
depressed and therefore the multiple based on the 2007 EBITDA number is
not meaningful.
2. Topps focuses on the high level of equity that Tornante and Madison
Dearborn are putting into the deal. That shows you that Tornante and
Madison Dearborn believe that there is a tremendous opportunity to create
value since it shows that the private equity buyers believe that they can
get to their target IRRs (of at least 20% per annum) even though they are
working with less leverage.
3. Despite what the Company keeps telling stockholders, there was not an
extensive and thorough value-maximization process. Only three parties were
contacted prior to signing the Merger Agreement. In addition, the four
members of the ad hoc committee (including Steve Greenberg and Allan
Feder) were disappointed with Lehman's performance and focus.
4. Topps fails to mention that the go-shop provision of the Merger Agreement
had minimal value since (a) there is no obvious natural strategic buyer
for the entire company (given the 2 diverse divisions), (b) Topps was
prevented from selling the Company in pieces (to 2 potential strategic
buyers) under the Merger Agreement and (c) as you know, private equity
firms are very reluctant to compete against each other during a go-shop
process. To maximize value, you had to conduct an intelligent process and
this was, as clearly acknowledged by the Delaware Court, anything but
intelligent. This go-shop was a sham!
5. It should be clear to all that there is a huge gap between the margins of
Topps and its competitors. With a properly run business, we believe that
this gap can be meaningfully closed which would create tremendous value
for stockholders.
6. We have talked to some very qualified CEOs. It should be clear from our
slate of directors the level of people we have been able to aggregate and
that should give you a sense of the type of CEO we could attract and
retain.
7. Finally, Topps claims that I said that $10 would scare Eisner. This
couldn't be further from the truth. WHAT I SAID WAS THAT AT $10, WE
SHOULDN'T WASTE MANAGEMENT AND THE BOARD'S TIME BECAUSE THIS PRICE WAS TOO
LOW. Willkie Farr's litigators twisted the truth (and as you have seen,
they are quite good at this) and went to argue that in front of Judge
Strine. I wasn't there to defend myself. To add appropriate context to
what I said is that under existing management Topps will not realize its
full potential, which we believe to be $16 to $18 a share in two years
under a new management team that implements similar value-enhancing
changes as the private equity buyers are likely to undertake for
themselves and not for Topps' stockholders. Topps also said in their
letter that I recommended a dividend over a buyback. They just forgot to
add that this was under current management!
In conclusion, our view is that Topps has been mismanaged for years, the process
that Topps went through was flawed and regardless of the fact that Upper Deck
has withdrawn its $10.75 offer, whatever the reason, the fact remains that the
$9.75 merger does not provide full and fair value for the Company's shares.
Regards,
/s/ Arnaud Ajdler
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Arnaud Ajdler
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
The Committee to Enhance Topps (the "Committee"), together with the other
participants named below, has made a definitive filing with the Securities and
Exchange Commission ("SEC") of a proxy statement, a proxy supplement 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 (the "Merger Proxy Solicitation").
Crescendo Advisors ("Crescendo Advisors"), together with the other participants
named below, 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 for the election of its nominees at the 2007 annual
meeting of stockholders of Topps (the "Annual Meeting Proxy Solicitation").
THE COMMITTEE AND CRESCENDO ADVISORS ADVISE ALL STOCKHOLDERS OF THE COMPANY TO
READ THE PROXY STATEMENT, AND OTHER PROXY MATERIALS, INCLUDING PROXY
SUPPLEMENTS, IN CONNECTION WITH EACH OF THE MERGER PROXY SOLICITATION AND THE
ANNUAL MEETING PROXY SOLICITATION 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 SOLICITATIONS 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. AT ITS TOLL-FREE
NUMBER: (800) 628-8532.
The participants in the Merger Proxy Solicitation are Crescendo Advisors LLC, a
Delaware limited liability company ("Crescendo Advisors"), 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 Partners III, L.P., a Delaware limited partnership
("Crescendo Partners III"), Crescendo Investments III, LLC, a Delaware limited
liability company ("Crescendo Investments III"), Eric Rosenfeld, Arnaud Ajdler
and The Committee to Enhance Topps (the "Merger Proxy Solicitation
Participants").
The participants in the Annual Meeting Proxy Solicitation include the Merger
Proxy Solicitation Participants, together with Timothy E. Brog, John J. Jones,
Michael Appel, Jeffrey D. Dunn, Charles C. Huggins, Thomas E. Hyland, Thomas B.
McGrath and Michael R. Rowe (the "Annual Meeting Proxy Solicitation
Participants"). Together, the Merger Proxy Solicitation Participants and the
Annual Meeting Proxy Solicitation Participants are referred to herein as the
"Participants."
Crescendo Advisors beneficially owns 100 shares of common stock of the Company.
Crescendo Partners II beneficially owns 2,568,200 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 2,568,200 shares of the Company
beneficially owned by Crescendo Partners II. Crescendo Partners III beneficially
owns 126,500 shares of common stock of the Company. As the general partner of
Crescendo Partners III, Crescendo Investments III may be deemed to beneficially
own the 126,500 shares of the Company beneficially owned by Crescendo Partners
III. Eric Rosenfeld may be deemed to beneficially own 2,694,900 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, 126,500
shares Mr. Rosenfeld may be deemed to beneficially own by virtue of his position
as managing member of Crescendo Investments III 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.
Timothy E. Brog beneficially owns 133,425 shares of common stock of the Company,
John J. Jones beneficially owns 2,301 shares of common stock of the Company, and
none of Michael Appel, Jeffrey D. Dunn, Charles C. Huggins, Thomas E. Hyland,
Thomas B. McGrath and Michael R. Rowe beneficially own any shares of common
stock of the Company.
FOR ADDITIONAL INFORMATION PLEASE CONTACT:
D.F. King & Co., Inc.
(800) 628-8532
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