Eisner's bid for topps conjures opposition

Michael Eisner still knows how to wow a board of directors. Or at least enough members to get what he wants. The former Walt Disney chief executive and his investment partner have received

approval from seven of 10 directors of the Topps Co. for a friendly, $385-million takeover of the maker of sports trading cards and Bazooka bubble gum. But it could prove one sticky deal for

Eisner. Two directors on Tuesday vowed in interviews to fight the proposal, accusing Eisner and his partner, Madison Dearborn Partners, of trying to buy the company on the cheap. They

argued that no bids were sought to compete with Eisner’s $9.75-a-share offer. “Eisner worked his magical spell on a majority of the board,” said director Timothy Brog, whose fund owns more

than 1% of Topps stock. “The people on the board that are [large] shareholders, including my fund, were not susceptible to his pixie dust.” Another director, Arnaud Ajdler, whose Crescendo

Partners II has 6.6% of Topps’ stock, pledged to lobby investors against the deal. Eisner didn’t immediately respond to interview requests. But a Topps spokeswoman said better offers hadn’t

emerged in the two years since the company hired investment bank Lehman Bros. to explore alternatives, including the sale of its confectionery division. Topps said it would seek higher bids

for 40 days before putting the Eisner deal to a shareholder vote. Eisner convinced Topps he could take the New York company’s trading cards, gum and candy from the schoolyard into new and

more glamorous places, leveraging his more than two decades at the helm of one of the world’s entertainment giants. If approved, Topps would mark Eisner’s third and largest investment in a

youth-oriented media company. Among the ideas that were tossed out during a brainstorming session were selling Topps products in movie theater lobbies and even on the screen itself. “Bazooka

Joe -- The Movie,” was perhaps the wildest suggestion, according to one person familiar with the pitch. Sports played a key role in Eisner’s expansion of Disney into a worldwide force, most

notably with the acquisition of cable network ESPN. Disney also owned two Anaheim-based sports teams -- baseball’s Angels and hockey’s Mighty Ducks -- during Eisner’s tenure, but has sold

both. Topps shares rose 90 cents Tuesday on word of the bid to $9.81. Topps, founded in 1938, has been grappling with flat revenue and vanishing profit for years, earning just $1.2 million

on $294 million in sales in fiscal year 2006. After decades in which it essentially had the baseball-card market to itself, Topps was hurt by an expansion in the number of companies making

cards since the 1980s. Major League Baseball has since cut the number back to two, Topps and Upper Deck Co. The company’s fortunes also have endured the ups and downs of collectible fads it

has helped support, such as the Garbage Pail Kids and Pokemon. A proxy fight by disgruntled Topps shareholders last year led to board seats for the three dissidents who now oppose the Eisner

deal. But Topps CEO Arthur Shorin described the deal as “a change in ownership, not a change in direction.” Shorin, 70, will leave his full-time job if the Eisner deal goes through, the

company said. Shorin is the son of one founder, Joseph Shorin, who was the model for the Bazooka Joe comics that have been distributed with the gum for decades. Last year, Eisner helped

provide $12.5 million in new financing for San Diego-based Veoh, an Internet distributor of user-generated and mainstream video, and his private investment firm, Tornante Co., bought Team

Baby Entertainment, which makes college and professional sports booster videos aimed at children. Terms of the Team Baby deal weren’t disclosed, but the company had annual revenue of less

than $1 million at the time of the acquisition. Eisner has succeeded in lending some star power to that company, which boasts celebrity narrators such as Jay Leno, Bob Costas, Pat Riley and

Regis Philbin. Veoh director Todd Dagres said he didn’t know whether Eisner planned to combine any of his various ventures, but that Eisner intended to deliver undisclosed content using

Veoh. * [email protected] MORE TO READ