The Topps company announced on Tuesday that it had entered into an agreement to be acquired by Michael Eisner's The Tornante Company and Madison Dearborn Partners, a private equity firm.  The acquisition price is $9.75 per share, roughly a 9% premium over Monday's closing price, for a total of $385 million. 


The company will be shopped for a period of 40 days to see if a higher price can be obtained.  Shareholder and regulatory approval is also necessary for the deal to close. 


Meanwhile, the hedge fund operators who have been unhappy with the performance of the company and won three seats on the board of directors after a lengthy squabble with Topps management (see 'Topps Reaches Settlement With Hedgers') are not pleased with the terms of the acquisition.  All three hedgers on the board, Arnaud Ajdler of Crescendo Partners, Timothy Brog of Pembridge Capital Management, and John Jones, voted against the deal.  Ajdler wrote a letter to members of the board complaining 'that the process that led to the signing of the merger agreement was flawed in that the board of directors did not shop the company and thus failed to maximize the competitive dynamics of a sale transaction that would have garnered the highest price available.' At least some investors think that Topps may eventually sell for a higher figure -- the stock closed Tuesday at $9.81, six cents higher than the buyout price.


If the deal does go through as currently constituted it will represent, according to Topps Company Chairman and CEO Arthur T. Shorin, 'a change in ownership, not a change in direction.'  But there will be a change in management, since according to an SEC filing, Mr. Shorin has agreed to retire within 60 days of the completion of the deal (though he will remain as a consultant).


When Shorin, who has been Topps CEO since 1980, does step down it will be a milestone for The Topps Company, which can trace its history back to The American Leaf Tobacco Company founded by Morris Shorin in 1890.  In 1938 Shorin's four sons Ira, Philip, Joseph and Abram decided to switch from tobacco to chewing gum and launched Topps Chewing Gum Inc.  From Bazooka Joe to baseball cards, from a growing list of confectionery items to Garbage Pail Kids and Star Wars cards, the company has surfed the roiling waters of American pop culture for nearly eight decades with far fewer wipeouts over the years than its competitors.  Topps' recent acquisition of WizKids, the company that invented the collectible miniatures game (CMG) and the constructible strategy game (CSG), only increases its importance to pop culture retailers.


WizKids management interviewed by ICv2 did not expect any major changes in the immediate future.


Former head of the powerful the Walt Disney Company, Michael D. Eisner, founded the privately held Tornante Company in 2005 to 'make investments in and incubate companies and opportunities in the media and entertainment space.'  The acquisition of Topps would be the Tornante Company's biggest investment yet by far.