Yesterday on BloggingStocks, I wrote that "one of the more depraved sagas in our nation's long and pathetic history of corporate governance has come to a close" upon The Topps Company, Inc. (NYSE: TOPP)'s announcement that shareholders had approved its deal to be acquired by Madison Dearborn Partners and Tornante for $9.75 per share.

Crescendo Partners, a fund that has lobbied hard against the deal, issued its own press release, saying that it has elected to assert appraisal rights.

In case you forgot, Crescendo reminds us that it opposes the deal, expressing its:

"extreme displeasure with the tactics employed by the Executive Committee of the Topps Board in order to just barely obtain the vote required to approve the proposed $9.75 merger, including (i) postponing the special meeting twice for no reason other than that Topps lacked the number of votes required to approve the deal, (ii) disseminating materially misleading proxy materials to the Company's shareholders, (iii) running a flawed sale process and (iv) excluding Arnaud Ajdler, Timothy Brog and John Jones from the process and preventing them from carrying out their respective duties as directors."

The press release also made reference to the long battle over the deal, suggesting that "if the Company had spent the same amount of time and money on improving the operating performance of the Company as it did on campaigning and soliciting for this ill-advised deal, then the Company would have been able to unlock substantially more value for its shareholders."

"Appraisal rights" refers to the right of shareholders in a company being acquired to demand the payment of a fair price for their shares, determined by an independent appraiser.

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.

The bidding war between Michael Eisner's Torante and Upper Deck over Topps Company Inc (NASDAQ: TOPP) has come to an end (for the moment, anyway) but all is not peaceful in baseball-card-land. One of Topps' major shareholders, Mario Gabelli of Gamco Investors, Inc., announced yesterday his support for Torante's $9.75 per share, $385 million offer for the company, which the Topps board voted to accept before Upper Deck ramped up its offer.

Gabelli's support runs counter to the opposition of hedge funds Crescendo Partners and Pembridge Capital Management. Gabelli holds around a 7% share of the company, while Crescendo's is slightly smaller. But, unlike Gabelli, Pembridge and Crescendo hold board positions.

Three proxy firms have recommended nixing the deal, and Wedbush Morgan estimated in June that the appropriate value of the stock purchase should be in the $11.50- 12.00 range, points that are sure to impact today's shareholder vote on the Torante bid. I'm guessing we haven't heard the last of this controversy.

Three proxy advisers have now spoken out against the $9.75 private equity offer for Topps Company Inc (NASDAQ: TOPP). What an ugly mess this has become -- playing out much more like a soap opera than a day at the ballpark. Let's review:

• In March, Topps gets an offer to be acquired for $9.75 a share from an investment group led by Michael Eisner's Tornante Co. and Madison Dearborn Partners.
• Topps agrees to the offer.
• In May, Upper Deck steps to the plate with a $10.75 a share counter offer.
• Yesterday, Upper Deck withdraws its offer based on "flawed" negotiations from Topps.
• Topps files with the SEC today, saying Upper Deck misled the company with its offer.

Topps is now due to vote on the original offer from the investment group, but three proxy adviser firms -- Proxy Governance, Institutional Shareholder Services and Glass Lewis & Co, have all recommended rejecting the deal.

Wedbush Morgan said in June that they believe Topps shares are worth between $11.50 a $12.00. With that in mind, along with the proxy firms' lack of support, the chances of this deal getting done for under $10 a share are not looking realistic.

If anyone thinks that strong corporate governance is alive and well in America (The tooth fairy isn't real), take a look at the behavior of Topps (NYSE: TOPP) management with regard to the ongoing buyout debate.

Tornante Co. and Madison Dearborn Partners LLC agreed to a deal to acquire the trading card/candy company for $9.75 per share, and the deal was almost universally blasted as being inadequate. Then Upper Deck, Topps' only major competitor in the baseball card space, came in and offered $10.75. Topps insisted that the offer was better for some complex reason, but most of us suspect the reason had a lot to do with the fact that Tornante and MDP had pledged to keep the company's current incompetent management team in place. Cynical observers, such as myself, wondered why $10.75 is a better deal than $9.75. Isn't the idea to sell the stock for the most money? Both proxy advisory firms have advised shareholders to vote against the MDP deal.

After what seemed like daily back-and-forth accusations, Upper Deck has finally given up on Topps like the Kansas City Royals should give up on baseball. It seems that the opposition of Topps management to the deal just made it too difficult to go forward with, and shareholders will pay the price. The stock closed on Tuesday over $10 per share, and now appears destined to be sold for $9.75.After dinner tonight, Upper Deck issued a terse press release and, just for fun, a scathing letter letting everyone know why it had terminated its offer:

...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...

Herb Greenberg: Is it too early to nominate the entire team over at Topps for worst CEO of the year? Shares are down more than 7% today.

Upper Deck has advised Topps (NASDAQ: TOPP) that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired with no request for additional information, satisfying one of the conditions of Upper Deck's tender offer for the company.

According to a press release put out by Topps:

Topps noted that it continues to negotiate with Upper Deck to see if a consensual transaction can be reached. Topps cautions, however, that there can be no assurance that a transaction will be reached with Upper Deck. The Topps Board has not withdrawn or amended its recommendation with respect to the merger agreement with The Tornante Company and Madison Dearborn Partners.

Topps is recommending that its shareholders accept the $9.75 bid from Tornante and Madison Dearborn when a $10.75 offer is on the table and the stock is currently trading at $10.14. I suppose that next we will hear that Topps is advising its shareholders to hand in their $10 bills for a five and four ones.

As I've written before on BloggingStocks, the management and board at Topps is looking more and more like a complete disgrace to corporate governance. The current management team has a deal in place allowing them to keep their jobs if Madison Dearborn and Tornante acquire the company, although most shareholders would agree that their leadership has been pathetic.

For more of my coverage of the battle for Topps, check out:

Will Eisner and Co. Collect Topps?

Upper Deck Gets Hostile in Pursuit of Topps

The saga of the Topps (NASDAQ: TOPP) buyout has dragged on far longer than anyone could have predicted. When the trading card company agreed to be acquired by Madison Dearborn Partners and Michael Eisner's The Tornante Company for $9.75 per share, BloggingStocks' Tom Taulli wrote that Topps had hit a single. He wasn't the only one who was less than enthused about the buyout. Several dissident Topps directors voted against the deal, and Topps responded by barring them from the go-shop process. Then Upper Deck made an offer of $10.75, and Topps rejected it, saying that Upper Deck didn't have financing and that the proposal had antitrust concerns. Upper Deck responded with a hostile tender offer.

Given the size of the buyout -- less than $420 million -- the deal has generated a lot of buzz. Perhaps it's that so many of us covering the deal have nostalgic memories of collecting our baseball heroes. But the level of rhetoric and the amount of back and forth has also made the deal interesting.

It's hard to know exactly how this will end -- will Eisner & co. raise their bid? The matter has ended up in court with a judge chastising Eisner and Topps with good reason -- the company forgot to tell shareholders that Eisner had agreed to keep the much-maligned current management team in place after the buyout.

BusinessWeek's Ronald Glover takes an interesting look at Michael Eisner's role in this whole mess, referring to him as the "drive-by victim of what's fast becoming a shareholder circus".

At this point, I would say that Upper Deck looks like the favorite to go home with Topps. The shares are trading at $10.59, indicating that shareholders are confident it won't go for the original $9.75 offer. The small spread between the current price and Upper Deck's offer indicates that investors believe an even higher offer could emerge.

The BusinessWeek piece cites sources who say that Eisner is unlikely to raise his offer, but it might be a mistake to count him out just yet.

As for his show on CNBC, I think you probably can count that one out. He's no Larry King, although King was recently a guest on the show.

As the New York Times Dealbook pointed out yesterday, references to Paris Hilton and jokes at her expense have become all too widespread of late. For that reason, this post will endeavor to contain only a modest number of Paris Hilton jokes.

Bill Gross, the once-proud bond guru at PIMCO, mentioned Paris Hilton three times in his July Investment Outlook:

Whew, that was a close one! Ugly for a few days I guess, but it could have been much worse! No, I refer not to Paris Hilton upon her initial release from the LA County pokey after serving three days of hard time, but to the Bear Stearns/subprime crisis.

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.

Here is a look ahead to next week's three day trading week:

Monday January 1

• Markets closed for New Year's Day holiday
• PDUFA date for Amylin Pharmaceutical's (NASDAQ: AMLN) Byetta

Tuesday January 2

• Markets closed in observance of President Ford's death

Wednesday January 3

• Earnings conference calls for AngioDynamics (NASDAQ: ANGO), Landec Corporation (NASDAQ: LNDC) and the Topps Company (NASDAQ: TOPP)
• Sales conference call for American Eagle Outfitters (NASDAQ: AEOS)

Thursday January 4

• Earnings conference calls for Arrow International (NASDAQ: ARRO), Monsanto Company (NYSE: MON) and Sonic Corporation (NASDAQ: SONC)
• Sales conference calls for Abercrombie & Fitch (NYSE: ANF), AnnTaylor Stores (NYSE: ANN) and bebe stores (NASDAQ: BEBE)

Friday January 5

• Shareholder meeting for Serono S.A. (NYSE: SRA)