Earlier this week Hugh Hefner made a $123 million offer in partnership with Rizvi Traverse to buy out the shares of Playboy stock he doesn’t already own in an effort to take the brand he made famous private once again (that’s more than a 30 percent premium on what those shares are actually worth, according to a report this morning at BusinessWeek.com).
Hefner currently owns 69.5 percent of Playboy’s Class A voting stock and 27.6 percent of the Class B nonvoting shares, according to the Business Week report.
Rumors of a possible Playboy sale have been batted around for as long as I’ve been covering sexy biz here, with rumored suitors including Richard Branson’s Virgin Group, but recently there have been some hard numbers attached to the back and forth: Today (Thursday July 15) FriendFinder Networks Inc. made a counter offer for $210 million, suggesting it would plan to give Hefner editorial control and continued residence in the Playboy Mansion as part of the deal. But Hefner remains adamant and the prolific Twitterer (@HughHefner has over 300,000 loyal followes) is up late tonight Tweeting his insistent point: “I’m buying, not selling.” And: “If I can satisfy my minority shareholders, I think taking Playboy private can help reinvigorate the brand. That’s how we began.”
Among today’s revelations: FriendFinder Networks Inc. apparently has access to $210 million? If you’ve been wondering who’s been making money online in the recession, look no further: Internet dating is a goldmine, and FriendFinder CEO Mark Bell – the new playboy in town – seems to desparately want the original Playboy for his portfolio. FriendFinder is now the parent company of longtime Playboy rival Penthouse, and seems to be on a quest to corner the sexy biz market altogether. According to a report today at Business.AVN.com, the dating and social networking company “claims over 30,000 websites with over 350 million registrants in over 160 countries.”
In a letter to the Playboy board of directors, FriendFinder proposed a July 21 meeting to discuss the offer. In the letter, Bell envisions an arrangement “where we would partner with Mr. Hefner in our efforts to drive shareholder value,” and, upon the completion of a successful transaction, “Mr. Hefner would retain editorial control of Playboy Magazine and would be entitled to reside in the Playboy Mansion.”
The FriendFinder letter to the Playboy board can be read here.
Hefner is 84 years old, and has been building his brand for more than 55 years, but ultimately the fate of Playboy will come down to a shareholder decision. Are Playboy fans witnessing the end of an era? I’ll be following this story as it develops.
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