Analysts and Board Members Agree: Topps Buyout Price is Too Low

According to newswire reports, analysts at Wedbush Morgan say the Topps Co. (TOPP) buyout offer that was accepted for $9.75 per share "strikes us as low." Analysts believe that the offer values the company at just 6.7 times estimated EBITDA per share of $0.95 for the year ending February 2009 and believe bids for the stock above $12 per share are possible. Yesterday, the maker of baseball cards and Bazooka bubble gum, accepted a $385.4 million takeover offer from a buyout group that included Tornante Co., a firm founded by former Disney CEO Michael Eisner.

Besides hearing an outcry from the Street over the proposed takeover, three of seven Topps directors have voted against the deal. Arnaud Ajdler, Managing Director of Crescendo Partners, the company's second-largest shareholder with 6.6% of the shares outstanding, and also on the board, voted against the deal because it "is not in the best interests of the company's shareholders and does not maximize shareholder value." In a filing with the Securities and Exchange Commission, he further stated that the Topps board did not "shop the company" and that he intends to "actively solicit votes and campaign against the proposed transaction." The stock is currently trading up $.06, or .61%, to $9.87 on moderate volume of 952,543 shares.

TOPP 1-yr chart: