When BloggingStocks's Tom Taulli wrote that Topps (NASDAQ: TOPP) had hit a single with it's agreement to be acquired by Madison Dearborn Partners and The Tornante Company, he realized a problem with the proposed buyout that has come to irritate many of the company's largest shareholders. The $9.75 per share offer wasn't much of a premium to the current share price, and left the company's long-term shareholders with a return on investment that was mediocre at best.

Then a grey knight arrived on the scene. Competitor Upper Deck came forward with an offer of $10.75 per share, but Topps rejected the offer, saying that Upper Deck had not demonstrated adequate financing and had failed to offer an adequate break-up fee. Topps also cited anti-trust concerns given that Topps and Upper Deck are the two biggest players in the trading card industry.

Having been spurned by Topps's management, Upper Deck is turning up the heat with a tender offer for all of the company's shares at $10.75 each, a premium of 10.25% to the $9.75 that Topps had previously agreed to be acquired at.

There's sure to be a lot more drama to come and the history of Topps had plenty of drama before this even started. Check out this Wikipedia entry for a nice overview of the company's history.

You might not have traded the stock, but you certainly traded its products. Topps Co. (NASDAQ: TOPP), maker of baseball cards and Bazooka bubble gum, announced on March 6 that it has agreed to be acquired for $385.4 million by the Tornante Company, headed by former Disney CEO Michael Eisner. Private equity investment firm Madison Dearborn Partners will also join in the purchase if the deal is approved by Topps' shareholders.

And that's when the bubble burst. The deal calls for Topps shareholders to receive $9.75 per share in cash. The problem is that the stock is currently trading above that amount. Topps stock closed at $9.89 on March 8, down $.05. The stock has generally been trading right around $10 per share since the start of 2007. So why agree to sell at below market rate? That is precisely the question asked by Arnaud Ajdler, one of Topps' own board members. Investment firm owns 6.6% of Topps' shares. It, too, is opposing the bid, calling the offer an "undervaluation." Ajdler has also asked the bid to be rejected because it did not follow proper procedures.

Topps board of directors, minus Mr. Ajdler, is in favor of the deal and is recommending shareholders accept the offer. The deal is not dependent on securing any funding. Eisner's Tornante Company would like to have the deal close sometime during 3Q 2007. Topps has a 40 day window during which it intends to solicit additional offers. Perhaps Mr. Ajdler can put together a better offer for shareholders.