Hugh Hefner Looks to Take Playboy Private

CHICAGO: Hugh Hefner, backed by a private-equity firm, has made a bid to take the company he founded, Playboy Enterprises, private, but could be facing a rival bid from the company that owns Penthouse.

The Playboy Enterprises (PEI) board has received a proposal from Hefner for the acquisition of all shares he doesn’t currently own for $5.50 per share in cash. Hefner owns 69.5 percent of the Class A stock and 27.7 percent of the Class B stock. The bid values the company at $185 million and has the financial backing of Rizvi Traverse Management. "I am excited about the prospect of Playboy returning to private ownership which will reinvigorate the company and create a lasting legacy for the Playboy brand," Hefner said in a statement. "

Hefner says in his proposal that his bid "provides an excellent opportunity for the minority stockholders of PEI to realize liquidity for their shares at a significant premium to market values. I believe the proposal will also reinvigorate the company I founded and create a lasting legacy for the Playboy brand, a brand we have all worked hard to establish as one of the most widely recognized and popular brands in the world"

Hefner has indicated that he does not want the company sold or merged with another entity, and will not sell his shares to a third party, "out of my concerns for amongst other matters the Playboy brand, the editorial direction of the magazine and our company’s legacy."

Meanwhile, Friend Finder Network, which owns rival Penthouse, is said to be preparing a counteroffer.

In related news, the law firm Robbins Umeda has commenced an investigation into the privatization bid, examining if the Playboy board and Hefner "are undertaking a fair process to obtain fair consideration for all shareholders of Playboy."