Bazooka Joe won't have to fill out a change of address form for now. Next week's Topps (NASDAQ:TOPP) shareholder vote on a privatization buyout offer is being delayed to give a rival bidder a shot at the trading-card giant.
Upper Deck has its chance, granted by a judge who sided with Topps investors who argued that the company's board was rushing to accept the lowest per-share offer and preventing the review of all information.
This story began back in March, when a group of private equity investors -- led by former Disney (NYSE:DIS) CEO Michael Eisner -- made a $9.75 per-share cash offer for the company. Rival bidders had 40 days to top the offer.
Upper Deck, the only real competitor to Topps in its sports-trading-card stronghold, heeded the dinner bell. It upped the ante with a $10.75 per-share acquisition offer. The court ruling gives Upper Deck its shot at sweet-talking Topps investors, but it's not a clear shot.
In a niche industry with just two major players, regulatory concerns surround the Upper Deck bid. Will it pass anticompetitive muster?
More importantly, can a small Upper Deck line up the financing necessary to seal the deal in time? And if Upper Deck plans to partly subsidize the deal by selling off the candy business at Topps, why would its luck be any different than when Topps tried -- and failed -- to move the confectionary subsidiary on its own two years ago?
The market doesn't expect much of a bidding war. There just aren't enough interested suitors looking to land a player in a pastime that may be past its time. Maybe there's another private equity firm mulling a play here. Perhaps we could see Hasbro (NYSE:HAS) grab a bidding card, as the parent of trading card game specialist Wizards of the Coast. It may even make sense for animated property licensee 4 Kids (NYSE:KDE) to think this one over, even if it has Upper Deck putting out its Yu-Gi-Oh! cards domestically.
However, that scenario may not be in the (pun alert) cards. Shares haven't traded above the $10.75 Upper Deck offer. But they are currently trading higher than the original $9.75 offer. So it makes sense to delay the $9.75 offer vote, which would have been vocally contested.
What this has hopefully done is give both potential buyers the chance to drum up internal support for a slightly higher offer. If you want to be on top of Topps, the clock is ticking.
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Longtime Fool contributor Rick Munarriz used to collect the original Wacky Packages stickers back in elementary school. He does not own shares in any of the companies in this story, save for Disney. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
