Shares of baseball card company Topps Co Inc fell 7 percent on Wednesday after hostile suitor Upper Deck Co. dropped its $417 million bid, leaving Topps with a $378 million offer from a buyout group and a firm led by former Walt Disney Co chief Michael Eisner.
Topps said it plans to hold Upper Deck accountable for all damages suffered by Topps and our stockholders, as a result of Upper Deck's actions.
In May, Upper Deck disclosed its unsolicited offer of $10.75 per share, which topped the buyout group's bid of $9.75 a share. Upper Deck launched a hostile tender offer in June, bypassing Topps management and bringing its bid directly to Topps shareholders.
The price of Topps shares had risen 2.3 percent from May 23, the day before the Upper Deck offer emerged, through August 21, when Upper Deck walked away. Shares of Topps closed at $9.28, down 73 cents, or 7.3 percent on Nasdaq on Wednesday.
Topps slammed Upper Deck's offer as being disingenuous. Topps said Upper Deck, which publishes sports trading cards and other memorabilia, had stalled negotiations and failed to agree to procedural terms to conduct a review of the company's proprietary financial records.
Topps said Upper Deck's decision to walk away confirms our suspicion that the tender offer was, in fact, a sham. Upper Deck's excuses on due diligence illustrate their dishonesty throughout this process.
Upper Deck could not immediately be reached for comment.
The agreement by Topps in March to be bought by Madison and Tornante immediately drew criticism from a member of Topps board and activist hedge fund Crescendo Partners II LP, which said the price was too low and also said the auction process was flawed.
This week, two proxy advisory firms recommended that Topps shareholders vote against the offer from Madison Dearborn Partners and Eisner's Tornante Co.
Proxy advisers Institutional Shareholder Services and Glass Lewis & Co. said Topps ran a flawed auction process and the $9.75 per share offer from Madison Dearborn and Tornante might not offer the best possible price for shareholders,
On Wednesday, Topps director Arnaud Ajdler and Crescendo urged investors to reject the $378 million takeover bid, saying the offer was too low. The dissident group also urged Topps investors to replace the Topps board with candidates nominated by Ajdler.
The dissident group said the new board nominees would replace Topps senior managers and revamp the company's capital structure. The group contended that Topps shares could be worth between $16 to $18 a share in two years.
Topps was not immediately available to comment.
(Reporting by Jessica Hall)