Upper Deck Spins Topps

Upper Deck is finally getting a chance to swing away.

The trading card specialist, which has been trying to disrupt a private equity buyout of rival Topps (Nasdaq: TOPP  ) , is back in the game. Topps management will now consider Upper Deck's hostile tender offer for $10.75 a share, with a decision expected in two weeks. (It's not every day that you see the words "hostile" and "tender" in the same sentence.)

Financing is no longer a roadblock, according to Upper Deck. That was one reason why Topps management originally favored a lower $9.75-per-share offer from a private investment consortium led by Madison Dearborn Partners and Michael Eisner's Tornante.

Topps' allure for the former Disney (NYSE: DIS  ) CEO is easy to understand, once you look into Tornante's acquisition last year of Team Baby Entertainment, a company that makes sports-related DVDs for children. Focusing on college teams, the videos help get kids excited about sports (and mom or dad's alma mater). Entering the baseball-card business is a logical evolutionary step to reach out to older kids beyond the Team Baby market.

The deal makes sense, but the original buyout group won't get Topps unless it matches -- or tops -- the Upper Deck offer. Topps originally expressed regulatory and financing concerns about Upper Deck's bid, but now that Upper Deck has come through with the funds for the tender offer, Topps is left clinging to the silly notion that the government won't let two tiny players in a stagnant niche get together.

If anything, the real surprise here is that an Internet company with a strong sports presence -- like Disney's ESPN, Sportsline parent CBS (NYSE: CBS  ) , or Yahoo! (Nasdaq: YHOO  ) -- isn't awake in this bidding contest. Hooking sports fans while they're young? The prospects of digitized trading cards? Topps is too colorful to go out this quietly.

Anatomy of a bidding war:

• Eisner came to terms with Topps in March.
• Upper Deck entered the bidding with a higher offer.
• Topps wasn't able to sell off its confectionary business two years ago.

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Longtime Fool contributor Rick Munarriz hasn't bought cards in years, though he still maintains a deep baseball card collection. He does own shares in Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy is more valuable than a Honus Wagner rookie card.