Penthouse owner to buy Playboy Enterprises
FriendFinder Networks has made a $210 million dollar offer to acquire Playboy Enterprises, topping a $185 million bid that the iconic men's magazine founder, Mr Hugh Hefner, had made to acquire shares of the company he didn't own.
In a letter to Playboy's Board of Directors, Florida-based FriendFinder, owner of the adult magazine Penthouse, has proposed that Hefner would retain editorial control after the completion of the transaction.
He would also be entitled to live in the Playboy Mansion, a sprawling estate the company owns in Los Angeles.
"We believe we can structure an offer to acquire Playboy Enterprises in a transaction worth over $210 million of equity value, which could increase based on our receipt and review of certain due diligence information including updated financial data," FriendFinder President and Chief Executive Officer, Mr Marc Bell, said in the letter.
Mr Bell has proposed a July 21 meeting with the Playboy board to discuss the deal, which represents "at least a 10 per cent premium over the proposal made by Hefner and Rizvi Traverse".
FriendFinder said its proposal is in the "best interest" of Playboy Enterprises and its stockholders, providing a basis for future growth.
"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 said.
Earlier this week, Hefner offered to acquire all of the outstanding shares of Chicago-based Playboy for $5.50 per share in cash, implying an equity value for Playboy Enterprises of approximately $185 million.
The 84-year-old publisher already owns around 69.5 per cent of Playboy Enterprise's ordinary shares and 27.7 per cent of its B shares.
In his proposal letter, Hefner had said he was not interested in a sale or merger of Playboy Enterprises, selling his shares to someone else, or entering into talks with other financial sponsors to do a similar deal.
Bell said he expects Playboy executives to continue in their management positions.
He expressed confidence that ample financial resources would be available to complete the transaction.
"We contemplate that the definitive agreements will not contain a financing contingency," he added.
FriendFinder is a global internet-based social networking company that owns over 30,000 web sites.
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