The battle over Bazooka Joe is over before it started.
A New York hedge fund has called off its proxy fight for The Topps Co. after becoming convinced management is serious about selling all or part of the struggling company.
Shares in the 67-year-old Topps, maker of Bazooka gum as well as its popular baseball trading cards, have traded sideways for years as both of its businesses – confections and entertainment – have struggled.
The languishing stock prompted Pembridge Value Opportunity Fund to start a proxy battle earlier this spring.
Arthur Shorin, the 66-year-old CEO whose family founded the company in Brooklyn in 1938, fought back fiercely, holding forth the promise of a brutal annual meeting later this month.
But Pembridge’s Timothy Brog, sensing the fight for control of Topps would be close, signed an agreement to put the battle on ice – and effectively put Topps on the market.
“There may be companies interested in acquiring [Topps], and this agreement is significant because it sends a clear signal to potential acquirers that a bid for the entire company would be entertained.”
Topps did not immediately return calls for comment.
Under the agreement hammered out between Topps and Pembridge, the hedge fund got $50,000 to cover the expense of its effort plus a promise from Shorin that the company would not put in place a poison pill that would put off potential suitors.
The stock, which was trading at about $10.50 in mid-2002, closed yesterday at $9.36, up 5 cents, or less than 1 percent.
Analyst Dennis McAlpine said part of the problem at Topps is that Shorin has taken a too conservative approach to managing the company.
As a result, Topps’ income has dropped in each of the past several years, to $11 million this past year from $17 million in 2003. Revenue has been languishing at about $2095 million.