Playboy to Go Private

CHICAGO: Playboy Enterprises has entered into a deal with a firm controlled by its founder, Hugh M. Hefner, to go private at $6.15 per share.

The price to be paid by Icon Acquisition Holdings, a limited partnership controlled by Hefner, represents a 18.3 percent premium over the closing price of Playboy shares on Friday, and a 56.1 percent premium over the closing price on July 9, 2010, the last trading day before the proposal was first announced. Icon Acquisition Holdings has obtained equity commitments for the transaction from an affiliate of Rizvi Traverse Management and a debt commitment from affiliates of Jefferies & Company, Inc. It will purchase all outstanding Class A and B stock that Hefner and affiliates don’t currently own.

"With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company," Hefner said. "The brand resonates today as clearly as at any time in its 57-year history. 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."

Scott Flanders will remain CEO of the privatized Playboy and will maintain a "significant equity investment" in the company. He commented, "Our strategy is to transform Playboy into a brand-management company. This transaction will advance our efforts by strengthening our balance sheet and streamlining our operations, while creating opportunities to participate in new ventures. I am excited about the future, and I look forward to working with our new partners as we guide Playboy into the next era."