Hefner gets his hands back on PlayboyBy DPA, IANS
Monday, January 10, 2011
LOS ANGELES - Hugh Hefner is regaining control of Playboy Enterprises, 57 years after founding the pioneering men’s magazine, the company said Monday.
Hefner, 84, will pay $207 million to take the company private and buy all the outstanding shares that he does not currently own. That sum represents an 18 percent premium on the company’s closing price Friday, prior to the announcement of the deal.
Hefner had been competing for the marquee publishing name with FriendFinder Networks, publisher of the rival Penthouse magazine. But the Playboy board said that selling the company to Hefner was in the company’s best interests.
Hefner said he hoped to revitalise Playboy as it struggles to compete with internet competition and a decline in print advertising rates.
“With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company. The brand resonates today as clearly as at any time in its 57-year history,” Hefner said in a statement.
“This agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world.”
Hefner founded Playboy in 1953 and took the company public in 1971, when circulation was around seven million. Last year the company guaranteed a monthly circulation of 1.5 million.
Playboy chief executive Scott Flanders, who will remain in the job under Hefner, said that the focus is to diversify away from publishing.
“Our strategy is to transform Playboy into a brand management company,” Flanders said. “This transaction will advance our efforts by strengthening our balance sheet and streamlining our operations, while creating opportunities to participate in new ventures.”