Playboy To Accept Hugh Hefner’s Buyout Offer

Sounds strange? We know! While we’ve all come to identify Playboy and Hugh Hefner as the same, the reality is that they are two separate entities.

That said, Hugh Hefner has been successful in his attempt to take the currently publicly-traded Playboy (PLA) private. Hefner already owned the majority of the stock in the company and he has reached an agreement with Icon Acquisition Holdings to pay $6.15 share for all of the outstanding shares that he doesn’t own. This price would represent an 18% premium from Playboy’s (PLA) closing price of $5.20 per share on Friday. At the start of trading on Monday, shares surged 17%.

Hugh Hefner, who is already the largest shareholder at around 70 percent, is the long standing editor-in-chief and chief creative officer. His idea behind this buyout is clear in his statement of, “I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world.”

This will put an end to a nasty bidding war that had started with rival Penthouse after Hefner made his original offer to purchase the outstanding shares for $5.50 each, which valued Playboy at $185 million.  FriendFinder Networks, the owner of Penthouse magazine, offered to buy Playboy for $210 million in July, 2010. At the time, that translated to $6.24 per share.

Playboy has been struggling with profitability in recent years, given the proliferation of free, online pornography.

[via link=”http://news.yahoo.com/s/ap/20110110/ap_en_ce/us_playboy_hefner_buyout;_ylt=AqGZLaq9JRWiFzKvMlNRA6JxFb8C;_ylu=X3oDMTJ0MGFvZWw3BGFzc2V0A2FwLzIwMTEwMTEwL3VzX3BsYXlib3lfaGVmbmVyX2J1eW91dARwb3MDNARzZWMDeW5fYXJ0aWNsZV9zdW1tYXJ5X2xpc3QEc2xrA3BsYXlib3lhZ3JlZQ–/”]Yahoo[/via]

Leave a Comment