Penthouse Owner Confirms Playboy Bid

BOCA RATON: FriendFinder Networks, parent company of Penthouse, has offered to acquire rival Playboy Enterprises for $210 million, topping the $185 million privatization offer from Hugh Hefner.

At the beginning of this week, the Playboy founder, backed by Rizvi Traverse Management, made an offer to acquire the Playboy shares he doesn’t already own for $5.50 per share. At the time, Hefner indicates that he was not interested in selling his shares in the company. Hefner owns 69.5 percent of the Class A stock and 27.7 percent of the Class B stock.

Marc Bell, FriendFinder Networks’ CEO, in a proposal to the Playboy board, notes that his offer reflects a 10 percent premium on Hefner’s privatization bid. "We would propose an arrangement where we would partner with Mr. Hefner in our efforts to drive shareholder value. We envision that following the completion of the proposed transaction, Mr. Hefner would retain editorial control of Playboy Magazine and would be entitled to reside in the Playboy Mansion."

Bell continues: "We believe our proposal is in the best interests of Playboy Enterprises and its minority stockholders. Our proposal provides an excellent opportunity for the minority stockholders of Playboy Enterprises to realize liquidity for their shares at a significant premium to market values, provides a basis for future growth, and would reinvigorate the company and enhance the legacy of the Playboy brand."

Bell concludes: "We believe that together we can create a 21st century media powerhouse and generate tremendous synergies through the combination of Playboy’s iconic brands and licensing engine with the Penthouse brands and the demonstrated technological innovations of FriendFinder Networks."