Upper Deck says it still wants consensual agreement to acquire Topps

By Lisa Kerner

Charlotte, N.C., Aug. 9 - The Upper Deck Co. responded to the Topps Co., Inc. through attorneys following Topps' statement on Wednesday that Upper Deck was attempting to bail out of its tender offer for the company.

Upper Deck accused Topps of "continuing the same unscrupulous tactics in which Topps and its directors have been engaged since at least February 2007, to justify Topps' repeated failure to negotiate in good faith with Upper Deck," according to a letter included in a company news release.

Despite its frustration with Topps, Upper Deck said it "has been steadfast in its desire to acquire Topps and has gone to great lengths and expense in the face of equally steadfast determination by Topps to prevent Upper Deck from acquiring Topps."

The letter reaffirmed that Upper Deck has committed financing from CIBC for the transaction, whether it is a one-step or a two-step transaction.

In closing, Upper Deck asked Topps when the company could expect to receive due diligence materials it has "repeatedly requested since at least April."

As previously reported, Topps, in a letter to Upper Deck, said it was "surprised" and "frustrated" by the lack of response from Upper Deck to Topps' attempt to negotiate a consensual transaction. Specifically, Topps said Upper Deck failed to respond to Topps' revised merger agreement.

Upper Deck's $10.75-per-share tender offer for Topps' common stock is set to expire at midnight ET on Aug. 10. However, Topps said Upper Deck has expressed "an unwillingness to proceed with its tender offer" and now prefers to proceed with a one-step merger. Such a move "would require several months, expose our stockholders to transaction risk during that time and, giving effect to the time value of money, reduce the value of the consideration received by our stockholders," according to Topps.

Topps said its directors are skeptical of Upper Deck's true intentions and question if the company is "simply taking steps to interfere with the current transaction with Tornante Co., LLC and Madison Dearborn Partners, LLC and otherwise harm Topps' business."

Despite Upper Deck's actions, Topps said it remains willing to finalize the terms of a definitive agreement with the company and outlined its preferred process: finalize the agreement for a two-step transaction; confirm Upper Deck's financing and both companies must finalize any remaining diligence.

But, Topps' board continues to recommend the March 5 merger agreement with Tornante and Madison Dearborn. The agreement calls for Topps shareholders to receive $9.75 per share. Shareholders are expected to vote on the transaction at a special meeting on Aug. 30.

New York-based Topps creates and markets sports and related cards, entertainment products and confectionery. Upper Deck is a sports and entertainment publishing company based in Carlsbad, Calif.

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