SPAC: Topps’ $1.3B Merger Deal Craters

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Topps, a major sports trading card company, has lost its merger deal with a special-purpose acquisition company (SPAC), after it lost its trading card partnership with a major sports league. 

  • Topps has terminated its merger agreement with Mudrick Capital Acquisition Corporation II (Nasdaq: MUDS), shortly after the Major League Baseball (MLB) said that it won’t renew its trading card partnership with Topps when its current contract expires in 2022.
  • Topps and the MLB have been long-time partners for up to 70 years so the termination of their partnership represents a significant blow to Topps’ business. Now, the MLB is expected to give its trading card business to Fanatics, a modern sports retail company.
  • After the news of its MLB saga broke, Mudrick Capital immediately moved to cancel its merger agreement with Topps. The two firms had previously agreed to merge in a deal valuing Topps at $1.3bn.
  • Topps’ merger termination is a souring point for the general SPAC market, which as of late has been dogged with issues including higher regulatory scrutiny and high investor redemptions. Now, Mudrick Capital, the SPAC Topps was supposed to merge with, will have to go find a new merger target.
  • Topps has said it’ll remain a private company now that its SPAC deal has cratered. The company, which was founded in 1938, is controlled by Michael Eisner, a former Disney CEO who led an investor group that paid nearly $400mn to take it off the public markets in 2007. 
  • Although its deal with the MLB is coming to a halt, Topps can at least console itself with its ongoing deals with Major League Soccer (MLS) and the National Hockey League (NHL). But it’s apparent that losing its deal with the MLB was enough to hamper the company’s exit plans, a sad day for it.

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