Topps's (NASDAQ: TOPP) deal to be acquired by private equity firms continues to generate angst from some of its largest shareholders. Hedge fund Crescendo Partners argued that the company's CEO, Arthur Shorin had a conflict of interest in negotiating with Upper Deck, a competitor who has made an offer for the company, because Shorin "does not want to see the company started by his father and uncles fall into the hands of a longtime rival."
Today Arnaud Ajdler, Crescendo's managing partner and a director at Topps, delivered a letter to the company's board, "in response to certain false and misleading statements included in a letter from Arthur Shorin, Topps' Chairman and CEO, to Mr. Ajdler dated May 31, 2007." Here are some of the highlights:
Finally, in your communications, you like to repeat that Crescendo wants to take over Topps without paying stockholders for their shares. Once again, you are misleading your stockholders. When a buyer wants to take a company private, as Mr. Eisner and Madison Dearborn are attempting to do, the buyer pays stockholders a premium for their shares. While this premium is typically 20 to 30%, you have approved a transaction that would pay stockholders a meager 3% premium and a significant discount to where the shares are currently trading... If the ill-advised Eisner merger is voted down, Crescendo will ask its fellow stockholders, the true owners of Topps, to replace seven of the incumbent directors on the Board with a new slate... As detailed in our proxy statement, we believe that the Company could be worth conservatively between $16 and $18 per share if managed properly.
