Hugh Hefner wins bidding war to make Playboy a private company
Hugh Hefner has won the bidding war over Playboy Enterprises and announced on Monday that he will take the company private in a deal that also secures his control of the business he began in 1953, according to The New York Times.
Playboy, which Hefner controlled for more than 50 years and became a publicly traded company in 1970, saw a drop in advertising revenue and a decline in readership in recent months. It also cut staff during the spring, which it said would save $3 million annually.
When talk of a buyout began over the summer, Hefner offered $5.50 for each share he didn't already own of Playboy in early July. The deal was valued at $185 million. At the time, Hefner owned almost 70 percent of the Playboy's Class A voting stock and almost 28 percent of its Class B non-voting stock.
Hefner was facing a battle from FriendFinder Networks, owner of rival publication Penthouse.
In the end, Hefner's offer was upped to $6.15 a share, which values his deal for Playboy at around $200 million, according to the New York Times. In a statement after the deal was announced on Monday, Hefner stated, "With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company."
He added, "The brand resonates today as clearly as at any time in its 57-year history. 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."
In July 2010, Hefner commented to OnTheRedCarpet.com about the bidding war. He said, "I just celebrated my 84th birthday. I want to be sure that it's [Playboy] financially secure."
Hefner added, "I think it's undervalued as a public company. I think as a private company we can bring in appropriate partners that will help us out financially and also help us in many other kinds of opportunities. I think the brand is so hot now; it gives us a chance to really grow."
The Playboy spokesperson also recently announced some personal success. On December 24, the 84-year-old founder of Playboy announced his engagement to 24-year-old Playmate Crystal Harris.