Who will buy Topps?

ndleo · May 17, 2005 1:05AM

NEW YORK (Market Watch) -- Pembridge Capital Management LLC said Monday it will launch a proxy contest against Topps Co. Inc. with the intention of getting three of its nominees elected to the bubble gum maker's board. Pembridge said its nominees, if elected, would consider selling all or part of the company. New York-based Topps' shares closed down 9 cents at $8.47 Friday.

----------------------------------

All the research I did indicates that the candy division would garner the most interest from a larger food company. The card division would be sold to an "entertainment" company.

If this keeps on going on, we will be back to one card company. Talk about Back to the Future!

Knuckles · May 17, 2005 1:15AM

It will be strange if upper deck does .. we'll see gum in packs along side sparkly highly glossed cards.

coachh · May 17, 2005 1:23AM

I buy them if they are from a year I collect or if I like the card. Nothing from newer cards though.

ndleo · May 17, 2005 5:04AM

Topps responds to the rumors:

NEW YORK, May 17 /PRNewswire-FirstCall/ -- The Topps Company, Inc. (TOPP) today made the following statement in response to market rumors:

In 2004, the Board of Directors of The Topps Company authorized management to retain an outside consulting firm to conduct a thorough strategic review of its domestic businesses, and to help develop opportunities to increase shareholder value.

As an outgrowth of that strategic review, in early 2005 the Board retained Lehman Brothers to study various alternatives, including without limitation, the evaluation of a sale of the Company's confectionery business. That study is ongoing. However, no decision has been made at this point as to whether any sale or other transaction will be pursued.

Additionally, the Board also authorized the outside consulting firm to conduct a second phase of the strategic review focused on improving operational processes, methods and procedures across the entire business, domestic and international. That review is expected to be completed in the next 90 days.

As previously disclosed, the Company suspended its stock repurchases during its fiscal fourth quarter and will continue in that mode until a public announcement regarding repurchases is made. Moreover, the Company does not intend to make any further comments in response to rumors concerning any asset sale or similar transaction unless a definitive agreement about such an event has been executed.
-----------------------------------

Art Shorin is 67 and is probably looking to cash out.

Lothar52 · May 17, 2005 7:25AM

ok....for those of us who are NOT business savy..what does this mean???? Is topps in trouble or???

yankeeno7 · May 17, 2005 8:59AM

If Topps is in trouble then its VERY bad management. They are one of VERY few companies that have no debt. For the most part, everything they sell is pure profit. There are a lot of die hard Topps collectors....though I think there are some quality issues, it would be a sad day to see Topps change hands.

Lothar52 · May 17, 2005 11:15AM

THey better freaking continue topps heritage for at least next year....why wouldnt they?

ndleo · May 17, 2005 11:16AM

Bottom line on Topps -

Their overall sales have been declining since 2001, mainly due to the card business. However their candy business has been growing. The stock has also declined since 2001. In order to unlock the true value of the candy biz, management feels that it has to seperate it from the card business. The fastest way to do that is to sell it. I've heard that Hershey may be interested.

That would leave the card business and a lot of cash since Topps has no debt. None of the reports I read say what will happen to the card business. They could sell it off or try to keep it going as a seperate company.

Personally I think that management will take Topps private and give the cash back to the shareholders. Shorin owns over 2 million shares and is 67, I think he wants the cash and leave the biz.

It will be a sad day when Topps gets sold. Maybe they will merge with Upper Deck or Donruss/Playoff.
Somehow it doesn't seem right that Topps will no longer be an independent company.

Carew29 · May 17, 2005 11:31AM

I haven't read a Wall Street Journal in a while, but i know they do list and rank management on most stocks from 0 to 100. I belive that good managemnt has to be 76 or higher.

ndleo · May 17, 2005 11:44AM

I think Topps management is lazy rather than bad. The company always makes money and every once in a while gets a boost when it catches a fad. They haven't cooked the books or took on a lot of debt chasing growth. In fact the worst thing they can be accused of is being too conservative.

A company with no debt, a lot of cash on the balance sheet, and is profitable will always be a target for the sharks.

yankeeno7 · May 17, 2005 12:18PM

I think Upperdeck or Donruss/Playoff buying out Topps would be the worst scenerio for collectors. If that happened, you may as just as well say that Topps doesnt exist.

A761506 · May 17, 2005 2:44PM

Topps is going to sell off their Bazooka gum and other candy interests, and Tootsie Roll is considered one of the best fits to buy it. The company wants to go into what they call entertainment, but that is not elaborated upon. If not for a cult of people buying all those gaming cards a few years ago, Topps' card business would be non existent today I think. I'll bet they are going to phase out many of the baseball card sets they currently produce.

ndleo · May 18, 2005 11:11PM

Did you know that Donruss is owned by a Finnish guy? That is news to me.

goudeygold · May 19, 2005 3:07AM

Lets say you own a business selling apples and oranges. The apples were making you money while the oranges are losing money. You hire an outside consulting firm to assess your business practices and give you direction. Now, would you sell off the loser (oranges) and keep the winner (apples)? Probably so. So why would Topps NOT sell the money losing card division and keep the money maker (candy) if this is indeed true? If it were my stock I would expect the publically held company to make me more money, which means see ya cards and hello candy man.

GG

NDFootballFan · May 19, 2005 3:20AM

Topps is making money on both cards and candy. Their candy business has more interest because it is more profitable than cards and it is growing. The card business still makes money but is in decline.

The reason they want to sell candy is because no one wants the cards business. In this market, who would?

goudeygold · May 19, 2005 3:48AM

So why would you want to concentrate your assets into a losing position? They must either be nostalgic, or they think they can use the cash to buy out competition? Or simply to buy them more time in hopes the modern card business turns around?

very interesting.

GG

ndleo · May 19, 2005 4:48AM

I think they will liquidate the company. Shorin is 67 and wants to cash out his 2.3 million shares.

donnnster · May 22, 2005 3:57PM

This is kind of off topic but maybe it shows how topps is getting desperate for money? Did you notice what topps recently did with their star wars promo cards? It looks like they ran some promo cards from their card set and all these promo cards are 1 of 1 rare items. Instead of distributing them as a true promo, they send them all off to psa to get graded. Now they are selling them on ebay to make money!

LINK

I don't know about you but that just seems kinda odd for a company to print their own cards, have them graded by psa, and sell them for a marked up price. I would hate to see other card companies use this tactic to generate more money for their company.

goudeygold · May 22, 2005 4:05PM

More proof Topps may indeed be cleaning house to boost revenue. Can't wait until the vintage stuff comes out... if they actually have it and didn't dump it in the ocean with the 52 Topps high number cases.

GG

Who will buy Topps?

Comments