Shares of Playboy stock surged nearly 35% this morning as a bidding war for the iconic adult entertainment company emerged between Hugh Hefner and Penthouse magazine.
According to Playboy Enterprises (PLA), Hef proposes to take the company private, offering to buy the remaining shares of the company at $5.50 each, a 40% premium over the $3.94 closing price from Friday, July 9. The offer values the company at approximately $185 million.
After the Playboy announcement, FriendFinder Networks indicated it was working on a rival offer that it plans to announce by Monday evening. They are the parent company of Penthouse. The company CEO Marc Bell acknowledged that Hef’s announcement definitely got his attention. He said: “We think the price is low and there’s a lot of value there.”
Hefner, 84, launched Playboy magazine in 1953, featuring nude photos of Marilyn Monroe in the first issue. He owns 69.5% of Playboy’s class A stock and 27.7% of its class B stock. He is reportedly working on a financial partnership with private-equity firm Rizvi Traverse Management to finance the deal.
The company reported a first quarter loss of $962,000. A year earlier they posted a $14 million loss but have been in the midst of restructuring with emphasis on licensing the brand. They will announce results for the second quarter on August 5.
Hefner saved the iconic Hollywood sign earlier this year by donating nearly $1 million.
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Photos: WENN