Upper Deck announced Tuesday evening that it has dropped its offer to buy rival card maker Topps, ending a hostile takeover attempt that became even more contentious in the last two weeks.
In a press release issued last night, Upper Deck said “the actions of Topps made the conditions precedent to the tender offer incapable of being satisfied.”
The statement was released 12 hours after Topps released the contents of a letter it sent to Upper Deck chairman Richard McWilliam in which it outlined potential concerns about Upper Deck’s ongoing tender offer, including allegations about changes to the terms of Upper Deck’s tender offer and demanding the company “own up to your true intentions” about whether it was serious about purchasing Topps.
The cancellation of Upper Deck’s tender offer means Topps shareholders now have only one offer to consider for the company – a $9.75-per-share offer from two equity firms headed by former Disney CEO Michael Eisner. That offer was agreed upon by the Topps board last March, but has been the subject of criticism by some shareholders and a handful of members of the company’s board of directors. Shareholders are scheduled to vote on the offer Aug. 30.
Upper Deck launched its hostile takeover attempt in June, a move that spawned reactions ranging from curiosity among licensors to apprehension from some hobby retailers about how a merger of the industry’s two largest card makers would impact sales. While some had assumed the deal would never pass government regulatory approval, the government issued no objections or concerns about the offer during its review period that expired earlier this month.
In the weeks since the antitrust concerns were erased, the companies have exchanged press releases accusing the other of not being forthright about their intentions. Topps accused Upper Deck of launching a tender offer it believed the company could not, or would not, complete. Upper Deck accused Topps of misleading its shareholders into accepting an inferior offer.
In its statement issued Tuesday, Upper Deck said it decided to pull its offer because, “It is now abundantly clear that Topps will attempt to impede any and all reasonable efforts to consummate the UD merger, which thus cannot possibly be consummated under the current circumstances. Accordingly, UD is left no choice but to immediately terminate its tender offer, as well as all merger discussions with Topps.”
The company left open the possibility of pursuring legal action “against Topps and those responsible for the collapse of this transaction,” saying its attempts to purchase Topps “would have been in the best interest of Topps’ shareholders.”
Earlier Tuesday, Topps accused Upper Deck of displaying a “willingness to risk judicial and regulatory sanctions” with what Topps describes as a “disingenous” tender offer of $10.75 per share. Among the most significant accusations is a claim by Topps that Upper Deck has stated in conversations between the two firms that it will only complete its tender offer based on an acquisition of 90 percent of outstanding shares, not the 51 percent stated in the original tender offer. Topps said such a stipulation leaves its shareholders with “less certainty and greater risk.”