Topps Co.’s plan to go public in a blank-check merger has been derailed by new exclusive contracts that Major League Baseball and its players’ union signed with a different trading-card company.

Topps, the leading baseball-card company since the 1950s, had reached a deal in April to become publicly traded through a merger with Mudrick Capital Acquisition Corp. II, a special-purpose acquisition company. SPACs are shell companies that raise money on public markets and then merge with a private business to make the target company publicly traded.

The deal fell through by mutual agreement after MLB and the Major League Baseball Players Association both reached new exclusive licensing deals with Fanatics Inc., an online sports-merchandise retailer, starting in the coming years. Makers of sports trading cards rely on such deals for the rights to use players’ images and teams’ logos and trademarks.

With the deal’s collapse, Topps will remain private, it said. The SPAC merger had been announced in April and would have valued the combined entity at about $1.16 billion.

“Topps expects to be able to produce substantially all its current licensed baseball products through 2025, pursuant to its existing agreements,” the company said Friday.

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ The Wall Street Journal Interactive Edition

Mudrick shares declined early Friday. The SPAC’s stockholders would have become Topps owners if the deal had succeeded.

Topps, founded in 1938, has been owned by Tornante Co. LLC—led by former Disney Chairman and Chief Executive Michael Eisner —and by private-equity firm Madison Dearborn Partners since Tornante and Madison Dearborn bought it in 2007 for $385 million. Mr. Eisner was to remain Topps’s chairman after the planned merger with Mudrick.

The deal’s collapse comes two days after Topps posted quarterly results that showed a strong recovery from the pandemic’s hit to its business a year ago. Between April and June, sales grew 78% year over year to $212.2 million. Its quarterly profit was $59.9 million, up from $13.5 million a year earlier.

The company, originally a candymaker, got into baseball cards in the 1950s and soon began packaging them with its Bazooka bubble gum. Rare cards prized by collectors can fetch millions of dollars, like a Topps Mickey Mantle that sold for $5.2 million earlier this year. Generations of young fans have enjoyed collecting the cards, which depict ballplayers wearing their team’s uniform thanks to licensing deals with MLB and the MLBPA.

That privilege will now belong to Fanatics, a fast-growing sports merchandiser led by Michael Rubin, a co-owner of basketball’s Philadelphia 76ers and hockey’s New Jersey Devils. Fanatics, which has aggressively pursued partnerships with major sports leagues for merchandising sales, was valued at $18 billion in a new fundraising round, The Wall Street Journal reported earlier this month.

In the latest quarter, more than 70% of Topps’s revenue came from its sports and entertainment segment, with its candy business contributing the remaining portion. In addition to baseball cards, Topps makes soccer and hockey merchandise, as well as memorabilia for other entertainment properties such as Walt Disney Co. ’s Star Wars and World Wrestling Entertainment Inc.

Topps has recently dabbled in offering digital collectables, an arena that boomed this year as people spent record sums on nonfungible tokens related to everything from sports to fine arts. Topps’s NFTs, which use blockchain technology to create unique digital memorabilia, were a key draw for the Mudrick SPAC when it pursued the merger.

Now, the deal’s termination will also send the SPAC, led by distressed-credit investor Jason Mudrick, searching for a new way forward. When it went public in January, Mr. Mudrick’s SPAC promised investors it would reach a merger within 21 months. Mr. Mudrick didn’t immediately respond to an email.

SPACs rode a surge of investor enthusiasm over the past year as they emerged as an increasingly mainstream way for companies to go public without a traditional initial public offering. More recently, however, traders’ excitement about SPACs has cooled and some high-profile deals have run into difficulties.

The process has come under heightened regulatory pressure. Last month, a SPAC led by hedge-fund billionaire William Ackman backed away from plans to invest in Universal Music Group, citing criticism of the deal by the Securities and Exchange Commission. In April, financial regulators said more broadly that some SPACs improperly accounted for warrants they had sold to investors, a twist that led to a slowdown in new SPAC IPOs.

Write to Matt Grossman at matt.grossman@wsj.com