from www.nypost.com – Founder wins.
Playboy founder Hugh Hefner has finally gotten his wish — OK, one of his wishes.
After months of wrangling to take his struggling adult entertainment empire private, including beating back a bid from a group led by rival Penthouse, Hefner succeeded in gaining board approval to buy back his iconic magazine in a deal that values the company at about $207 million.
Hefner will pay $6.15 a share — topping his earlier offer of $5.50 in July — with financial backing from private-equity firm Rizvi Traverse Management, which will become part owner.
The 84-year-old Hefner is already Playboy’s largest shareholder with about 70 percent of the company’s voting shares and 28 percent of the nonvoting stock.
Hefner sweetened his bid after Marc Bell, CEO of FriendFinder Networks, which owns rival porn title Penthouse, offered $6.25 a share.
Bell, whose $210 million offer represents a slight premium, told The Post yesterday that he’s giving up on Playboy and will respect the board’s decision to back Hefner’s bid.
“We wish them well,” Bell said in a phone interview.
Shareholders also seem to have come to terms with the transaction. Playboy’s shares rose 17 percent to $6.09 yesterday on the news, roughly in line with Hefner’s offer price.
Stanford, Conn.-based hedge fund Plainfield Asset Management and its affiliates have already agreed to tender their 19 percent stake of the Class A shares, Playboy said yesterday.
David Bank, an analyst with RBC Capital Markets, said he expects other shareholders will follow suit.
“I think they will take the bird in hand,” he said.
Playboy, which Hefner founded in 1953, has been suffering from dwindling ad sales and increased competition in a world of easily accessible Internet porn.
To offset declines, CEO Scott Flanders, who will keep his position under the terms of the deal, has embarked on a strategy to profit from Playboy’s famous bunny ear logo through ramped-up licensing deals.
But Hefner, who believes Playboy can remain relevant long past the era of pinup girls, seems to think he can turn around the company faster out of the public eye.
Hefner will regain control of his empire once a majority of the other shareholders tender their shares.