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Upper Deck Files Suit While Bidding on Topps

Upper Deck, the Carlsbad maker of sports trading cards that made a bid to buy out rival card maker Topps Co. last month, filed a lawsuit against Topps in a Delaware court, according to a securities filing June 6 by Topps.

The lawsuit alleges Topps fraudulently induced Upper Deck to enter a confidentiality agreement with Topps, and that Topps breached that agreement.

Upper Deck is seeking an injunction preventing Topps from enforcing the standstill provisions of the confidentiality agreement which would prevent Upper Deck from making a tender offer for all of the company’s stock.

In May, Upper Deck made an offer of $10.75 per share for each of Topps’ shares for an aggregate $416 million. That offer was $1 more per share than an earlier tender offer made by a partnership of the Tornante Co., owned by former Disney Co. CEO Michael Eisner, and the private equity firm Madison Dearborn Partners. The lower bid was for an aggregate $385 million.

All this may be much ado about nothing, a way of gaining leverage in the bidding process, or simply more work for lawyers since the same Topps filing notes the company is continuing to engage in discussions and negotiations with Upper Deck, its counsel and advisors, and is allowing them to conduct a due diligence review of the business for a possible acquisition.

The filing states the Topps board has not yet determined whether the Upper Deck proposal is a “superior proposal.”

, Mike Allen

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