Topps (TOPP) deal approved

One of the more depraved sagas in our nation's long and pathetic history of corporate governance has come to a close.

Topps (NYSE: TOPP), a maker of sports cards and candy, says that shareholders have approved a $9.75 per share offer from Madison Dearborn Partners and Tornante, a private equity firm controlled by Michael Eisner.

Upper Deck had offered $10.75 per share in a hostile offer, but finally withdrew the offer last month, saying the following:

...roadblocks have been created by Topps as part of a deliberate effort to discredit UD (both publicly and internally with the Topps employees upon whom UD would need to rely post-closing of this acquisition), defeat UD's offer, and justify entrenched management's continued shameless support of the less favorable Tornante/Madison Dearborn transaction. 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...

Although relatively small in size, the Topps buyout presented as much drama as any recent takeover battle. The company had been underperforming for years, had several angry activist hedge funds pushing for chance. When it accepted the offer from Tornante, it insisted that it was in the best interests of shareholders -- in fact it was better than offer that was more than 10% better!

Then Topps forgot to disclose that, oh, by the way, the CEO would get to stay on as a consultant newly-private company, although many shareholders had been calling for their heads for years. After a judge chastised them, they disclosed the conflict of interest in an 8-K filing.

Someday, Topps will be a Harvard Business School case study on incompetent management and bad corporate governance.