Value Investing News - Crescendo Partners Said Topps Buyout Offer is Inadequate - Comments

Got One Response Already

Geoff — Tue, 06 Mar 2007 16:09:28 -0500

As I said above, I'd be interested in hearing from owners of Topps stock and whether they're for or against the deal (as well as if they'd hold their shares and vote against if against). I left the same note on my blog as well.

I received a response already! He said he'd be voting "no". I also noticed that Seeking Alpha picked up my post and ran it with the headline:

"Is Michael Eisner 'Stealing' Topps?"

If the deal gets publicity along those lines – The name Michael Eisner and the image of Topps cards – I think it might get more negative publicity than most deals this size (which usually don't get any attention at all).

"The fact that an

Nick — Tue, 06 Mar 2007 13:51:13 -0500

"The fact that an underperforming business like this carries that much cash and that all it is good for is making a deal more attractive to private equity – honestly, that saddens me. Sometimes, I think managers of public companies could learn something from private equity. Why can't you deal with the fixer upper yourself?"

You asked a great question. I have to wonder if it has more to do with incentives (either the lack of or ineffective incentives) than the management's abilities. Obviously the incentives for Private Equity are clear.

It's Tough to Say

Geoff — Tue, 06 Mar 2007 13:33:33 -0500

It's always tough to say in these situations. But, I was just browsing the list of major institutional owners of Topps stock and – well, it's quite a list. It's a value list. It's not an activist list per se, but it might not be a list you can count on to kiss the CEO's pinky ring.

I have to look things over some more, but this was a company I often followed just because I thought the product should make for great profitability / free cash flow. In this way, it's like Tootsie Roll (TR) another company I check in with just because of what it sells.

But, that's where the similarities end. Tootsie Roll has been beautifully managed – I don't think you can say the same about Topps.

I think there's a real danger of some momentum building up against this deal. Eisner's name won't help. This might actually even make it into the mainstream media, if those opposed don't back down.

Anyway, I don't own shares. And I'm interested in hearing from people who do. If anyone at Value Investing News owns shares of Topps, please send me an email with your thoughts – or comment to my blog, or comment right here. I'd like to know how actual owners feel about this one.

Personally, I can't hide the fact that this is not the kind of deal I like to see. These deals make me feel like private equity steps in where managers fears to tread. This is a public company, it has cash on its balance sheet. Do something about it. If your stock is extremely undervalued do a huge tender – if your stock isn't overvalued, pay out a special dividend. The fact that an underperforming business like this carries that much cash and that all it is good for is making a deal more attractive to private equity – honestly, that saddens me. Sometimes, I think managers of public companies could learn something from private equity. Why can't you deal with the fixer upper yourself?

Do you think Ajdler will be

Nick — Tue, 06 Mar 2007 13:10:04 -0500

Do you think Ajdler will be able to overcome the 7-3 vote in favor of deal?

Crescendo Partners Said Topps Buyout Offer is Inadequate

Geoff — Tue, 06 Mar 2007 12:01:47 -0500

And so it begins...here's a post from Street Insider's 13D Tracker Blog that includes the letter that is sure to set off a fight between Eisner and friends and Crescendo Partners. The trading card and bubble gum company, Topps (TOPP), hangs in the balance.