Private Equity News & Analysis

Hefner moves closer to Playboy take-private

Playboy’s board has approved a bid from Hefner and private equity firm Rizvi Traverse of $6.15 per share, up from a previous bid of $5.50 per share.

By
Graham Winfrey
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Playboy’s board has approved a bid from Hefner and private equity firm Rizvi Traverse of $6.15 per share, up from a previous bid of $5.50 per share.

Playboy publisher Hugh Hefner has moved a step closer to taking his iconic media brand private.

Playboy’s board has approved a bid from Hefner and Detroit private equity firm Rizvi Traverse Management of $6.15 per share. The offer values the company at approximately $177 million, according to the The New York Times.  Hefner and Rizvi first tried to take Playboy private in July 2010, bidding $5.50 per share for the company. The $6.15 per share price represents an 18.3 percent premium over the closing price as of 7 January, 2010 and a 56.1 percent premium over the closing price on 9 January, the last trading day before the proposal was first announced.

Hefner currently owns 69.5 percent of the company’s Class A shares and 27.7 percent of the Class B shares. The deal, which is expected to close near the end of Q1 2011, includes a debt commitment from Jefferies & Company.

Playboy chief executive officer Scott Flanders will continue in his position and will maintain a “significant equity investment” in the company. “Our strategy is to transform Playboy into a brand management company,” Flanders said in a statement.

Lazard is acting as financial advisor to Playboy and Skadden, Arps, Slate, Meagher & Flom are acting as legal counsel.

Rizvi Traverse is currently raising its second “Opportunistic Equity Fund,” which had collected $106 million as of 2 September, 2010, according to an SEC filing. A spokesperson for Rizvi was not available at press time.