Playboy (NYSE: PLA) Enterprises’ acceptance of founder Hugh Hefner’s offer to take the company private ends an odyssey that began two years ago when his daughter, Christie Hefner, was pushed to resign as the company’s CEO and chairman. The 84-year-old Hefner’s winning bid was for $6.15 a share, valuing the company at around $207.3 million, the WSJ noted (Reuters’ math said the offer values Playboy at $180 million).
This is a pretty hectic year for Hefner on the personal and professional front. As Playboy trimmed its losses somewhat, though it continued to struggle despite the ad recovery, Hefner finalized his divorce to Kimberly Conrad after an 11-year-celebration and late last month, proposed to Crystal Harris, a 24-year-old Playboy Playmate who would be his third wife.
In taking the company private, Hefner said in a statement that this would allow Playboy to return to its roots. But the media business has changed a lot since the company published its first issue in December 1953. In recognition of that, the company is emphasizing its value as a “brand management company” — the magazine’s business side has been managed by American Media Inc., publisher of National Enquirer, Star and Shape, for the past year — something that the company has done a poor job in the recent past.
Hefner already who has 69.5 percent of Playboy’s Class A shares and 27.7 percent of the Class B shares. To make this deal happen, Hefner partnered with Icon Acquisition Holdings LP, which has gotten equity commitments from a unit of private-investment firm Rizvi Traverse Management LLC and a debt commitment from Jefferies & Co.
Playboy CEO Scott Flanders, who was brought on in May 2009 to find an outside buyer, will keep his job and continue to hold a “significant equity investment” in the company. Flanders did come close early on in his tenure to striking a sale deal with Iconix Brand Group, but that deal ultimately fell apart.
Hefner’s deal is expected to close by the end of Q1, after which, it will no longer have to make announcements such as the one it did last week, where Playboy warned investors that it would be taking a $13 million impairment charge related to the settlement of its lawsuit with DirecTV (NYSE: DTV). Release
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