Playboy rises on Hefner's offer
Chicago - The publisher of Playboy magazine said on Monday it has agreed to a sweetened offer by founder Hugh Hefner to take the company private.
The price of $6.15 a share is an 18% percent premium over Friday's closing price and values the company at about $207 million. The bid tops Hefner's offer of $5.50 per share in July.
A group led by Penthouse magazine has also made an offer for Playboy Enterprises valued at $210m.
But Hefner is Playboy's largest shareholder with about 70% of the company's voting shares and 28% of the nonvoting stock.
The company's namesake magazine has struggled with competition from the Web, losing readers and advertisers. In November the company reported a wider third quarter loss than a year ago as its revenue fell 7% to $52.1m.
Playboy's management has been trying to transform the company from a publishing and TV business into a "brand management" company, leaning more on revenue from licensing out the Playboy name and bunny ears for a range of products.
A group of board members had been evaluating Hefner's offer and decided to recommend the deal to stockholders on Sunday night.
"I believe 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 said.
CEO Scott Flanders will remain in that position. A tender offer is expected to begin by January 21 and the deal is expected to close by the end of the first quarter.
Playboy shares rose 90 cents, or 17.3% to $6.10 in pre-market trading on Monday.