Upper Deck drops its offer for Topps

Upper Deck Co. withdrew its offer Tuesday to buy rival baseball card maker Topps Co., clearing one obstacle in the way of a proposed private equity takeover of the iconic sports memorabilia company.

New York-based Topps, maker of baseball cards and Bazooka bubble gum, has recommended that shareholders approve a deal with investors, including a group led by former Walt Disney Co. Chief Executive Michael Eisner. Shareholders are scheduled to complete a vote on that deal next week.

Eisner’s Tornante Co. and the Chicago-based private equity firm Madison Dearborn Partners agreed to pay $9.75 a share, which amounts to a 9.4% premium over their first offer in early March.

The Tornante-Madison deal has been opposed by the Crescendo Advisors hedge fund and generated a lawsuit that accuses Topps directors of breaching their fiduciary duty by agreeing to sell the company at a price that was too low and signing off on measures to ward off other bidders.

Topps shares gained 7 cents to close at $10.01 on Tuesday.

Upper Deck had said it would pay $10.75 a share, but Topps executives raised doubts about Upper Deck’s ability to complete the deal.

In a letter to Topps on Tuesday, Upper Deck attributed its decision to Topps management’s “shameless” support for a lower bid. Shares already tendered will be returned, Carlsbad, Calif.-based Upper Deck said.

“It is now abundantly clear that Topps will attempt to impede any and all reasonable efforts to consummate” the Upper Deck merger, making pursuit of the company untenable, Upper Deck said.

Topps said in a letter to Upper Deck Chief Executive Richard McWilliam on Tuesday that despite its efforts it had not been able to reach a consensual agreement and had no assurance of reaching one. Last week, Upper Deck had said it was still interested in acquiring Topps.