Hugh Hefner bids $185 million to buy out Playboy
12 Jul 2010
Playboy Enterprises Inc said on Monday that it has received an offer from founder Hugh Hefner to buy all of its outstanding shares and take the company private, in a deal worth around $185 million.
Hefner has offered to buy all shares of PEI he doesn't currently own, for $5.50 per share in cash, a premium of about 40 per cent to its closing price of $3.94 on Friday.
He already owns around 69.5 per cent of Playboy's Class A common stock and 27.7 per cent of its Class B stock.
Playboy said Hefner is partnering with Rizvi Traverse Management, which will raise financing for the transaction from major lenders.
Hefner, in his proposal letter, said he is not interested in any sale or merger of Playboy Enterprises, selling Hefner's shares to any third party or entering into discussions with any other financial sponsor for a similar transaction.
In his proposal, Hefner said he only intends to partner with Rizvi Traverse Management LLC and that he had discussions with the firm in connection with the transaction. He also said that Rizvi Traverse has contacted major lenders regarding potential financing and has assured ample financial resources to complete the transaction.