Playboy shares sizzle in bidding war

[papill0n]

The battle for Playboy is heating up, with a plan by Hugh Hefner to take the company private set to be trumped by Penthouse.

Playboy Enterprises Inc looks likely to be in play with opposing bids from founder Hugh Hefner and the company that owns long-time rival Penthouse magazine.

Shares of Playboy shot up 42 per cent in New York Stock Exchange midday trade.

Hefner has offered $US5.50 ($6.30) in cash for each of the shares he does not already own - a premium of about 40 per cent to the Friday closing price of the Class B shares. The bid values Playboy at $US185 million.

Hefner currently owns around 70 per cent of Playboy's Class A common stock and 28 per cent of its Class B stock.

Shortly after the announcement, Friend Finder Network, the owner of Penthouse, said it was preparing to make a counteroffer later on Monday (US time).

Friend Finder chief executive Marc Bell said Hefner's offer "dramatically" undervalues Playboy.

The offers for Playboy come as the company struggles with a drop in advertising revenue and a decline in readership of its iconic flagship magazine.

In late June, the company said it cut staff to save $US3 million annually.

More than a year ago Playboy appointed Scott Flanders, the former chief executive officer of Freedom Communications and the publisher of the Orange County Register, as its top executive.

Previously, Christie Hefner, Hugh Hefner's daughter, ran the company.

In December, Playboy was in talks to sell itself to Iconix Brand Group Inc, a company that licenses clothing brands such as Joe Boxer, but no deal was reached.

- Reuters

http://www.abc.net.au/news/stories/2...section=justin

hugh > you

[Relentless]

Since Hefner owns 70% and shares are up 42%

Hugh 42% > yesterday

[Rochard]

Hef isn't going to buy it. He's going to have an investment company buy it for him.

So whatever.