As expected, FriendFinder Networks, the publisher of rival men's magazine Penthouse, made a $210 million offer to purchase Playboy Enterprises Thursday, in an attempt to trump Playboy founder Hugh Hefner's bid to take the company private.
In a letter to Playboy's board July 15, FriendFinder CEO Marc Bell proposed a meeting with the company on July 21 to hammer out an agreement, adding that the company would like to keep Hefner on as a partner as well as Playboy's current management.
"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 wrote. "... 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."
The FriendFinder deal works out to about $6.25 per share, ahead of the $5.50 per share offer Hefner made to take the company private on July 12.
While the FriendFinder bid was expected - Bell had said the company was preparing an offer shortly after Hefner made his July 12 announcement - it may be moot, given that Hefner has a controlling interest in Playboy. Hefner owns about 69.5% of Playboy's Class A common stock and 27.7% of its Class B super-voting shares.
Hefner has stated that he was not interested in selling his stake in the company.
Playboy in a statement said its board would give the FriendFinder proposal "appropriate consideration."
Playboy stock was trading at $5.57 each, up 6 cents (1%) in afternoon trading Thursday.
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