Hefner Tries to Take Playboy Private
Hugh Hefner offers a deal to take Playboy private, at a time when private money is increasingly attractive to listed companies strapped for cash.
July 12, 2010
Playboy’s founder, Hugh Hefner, made a bid to take the company he founded private.
Hefner is offering $5.50 per share to buy Playboy shares that, at the end of trading last week, hovered around the $4 range, after they had gained in excess of 20% in trading so far this year.
Playboy’s take-private offer comes as most print media properties are being sold at either excessive discounts, or out of bankruptcy. Hefner will partner with Rizvi Traverse Management to make the investment. Despite having lost most of its print circulation, Hefner’s investment in the company could position it well against online competition.
The company announced in late June that it downsized its organizational structure, costing $3 million in the second quarter. Calls seeking comment were not acknowledged by press time.
While the magazine has run aground in a digital age (its readership has dwindled substantially from its peak years), the company’s brand—both for online content and for Hefner’s successful reality television shows—remains poised for growth. Listed brand group Iconix has bought up the family cartoon Peanuts’ brand, as well as the Ed Hardy t-shirt label, for example.
Lately, a series of take-private deals have underscored listed companies’ willingness to sell out now (or take debt from PE), thanks to markets’ rise over the course of the first half of 2010. Mediacom Communications received a buyout offer from its chairman and CEO Rocco Commisso to take the company private. Rubio’s Restaurants, the listed, California-based restaurant chain, was bought by Mill Road Capital for $91 million. Also, listed, Texan jeweler Zale took a $150 million loan from Golden Gate Capital.
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