Mudrick SPAC-Topps Deal Collapses After Losing MLB Card Deal
Mudrick SPAC, Topps Dump Merger Plan After Losing MLB Cards Deal
(Bloomberg) -- Topps Co. will no longer go public through a merger with blank-check firm Mudrick Capital Acquisition Corp. II, a significant blow for the trading card maker after it lost its longtime contract with Major League Baseball.
The deal to go public was ended by mutual agreement after notification from MLB and its players association that they wouldn’t renew their agreements with Topps when the pacts expire in the coming years, Mudrick said Friday in a statement. The league agreed to a new deal with Fanatics Inc., a rapidly growing sports apparel and collectibles retailer, Bloomberg reported.
The MLB decision was a major setback for Topps, which has made the league’s cards for decades. The affiliation has produced some of the most notable trading cards in history, including a 1952 Mickey Mantle that sold for $5.2 million at auction earlier this year. MLB and the Major League Baseball Players Association gave notice Thursday of their decisions not to renew the Topps deal, Mudrick said.
“Topps expects to be able to produce substantially all its current licensed baseball products through 2025, pursuant to its existing agreements,” the company said in a separate statement. Topps this week raised its forecast for the year after reporting a 78% increase in second-quarter net sales.
Topps now risks being largely edged out of the burgeoning trading card market, which has exploded in popularity as sports memorabilia gains traction as a legitimate alternative asset class. The rising interest from investors has also heightened competition between Topps, Panini SpA -- which produces cards for professional basketball and football leagues, among others -- and now Fanatics for exclusive licensing deals.
Fanatics may be poised to further expand its presence in the card market after signing separate deals with the National Basketball Association and the National Football League, the Wall Street Journal reported Thursday, citing unidentified people familiar with the matter.
Topps, co-owned by entertainment mogul Michael Eisner since 2007, agreed in April to go public through the deal with Mudrick, a special-purpose acquisition company. The parties said at the time that they expected a combined equity value of $1.2 billion.
Shares of the Mudrick SPAC rebounded from a premarket slump of as much as 9.5% to trade 2.4% lower at $9.87 at 9:49 a.m. in New York.
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