Pembridge Capital Management, a New York-based activist hedge fund, plans to nominate its own slate of directors at the Topps Company annual shareholders meeting.  Pembridge is seeking to get its own nominees on the Topps' board of directors, where they can implement a number of strategies to increase shareholder value including selling a portion of the company, declaring a special dividend or carrying out a significant share repurchase program either in the open market or as part of a self tender offer.  According to a source quoted by Yahoo Finance, Pembridge owns less than 5% of Topps' stock, which means that Pembridge and Topps will be engaging in a struggle to obtain proxies from Topps shareholders.

Topps, which is the oldest extant trading card manufacturer in the U.S., has two primary business segments, a confectionery division, which produces Ring Pops, Juicy Drop Pops, and Bazooka Joe bubble gum, and an entertainment division, which primarily produces a variety of sports and non-sports trading cards.  Topps has been considering the sale of its confectionery business, but has not made a decision.  While the trading card markets in the U.S. and Europe have been in the doldrums for the past few years, Topps' WizKids division, which makes collectible miniatures games and constructible strategy games, has demonstrated solid growth in the past few quarters (see 'Topps Profits Slump in Q4').

While Pembridge Capital blames Topps management for the company's sales slide, outside observers might be more likely to see market forces at work in the mercurial sports and entertainment card arenas -- and what might be the best strategy in the short term interest of Topps stockholders (the breakup and sale of the company's brands and assets) might not produce the best outcome for the retailers in the various industries for which Topps produces trading cards, candy and games.