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Playboy agrees to Hefner buyout offer

January 10, 2011|By Robert Channick

CHICAGO — More than 57 years after launching Playboy from his Chicago apartment, Hugh Hefner is buying back the bunny.

After six months of deliberation, an improved offer to take Playboy Enterprises private at $6.15 a share passed muster with the board, which voted Sunday to return the magazine empire to its 84-year-old founder.

The bid represents an 18 percent premium over Friday's closing price and values the company at about $207 million.

In July, Hefner offered $5.50 a share to take the money-losing company private. That bid was subsequently topped by a $210 million offer from FriendFinder Networks, the Florida-based owner of longtime rival Penthouse. With nearly 70 percent of the Class A voting stock, Hefner's controlling interest -- and beefed-up offer -- ultimately swayed the board.

"The transaction is advisable, fair to and in the best interests of the Company's public stockholders," said board member Sol Rosenthal in a statement released Monday. Rosenthal headed up a special committee reviewing the offer.

Hefner has funding commitments from Rizvi Traverse Management and Jefferies & Company. The tender offer will be made by January 21, with the deal expected to close near the end of March, according to officials.

Shares of Playboy jumped almost 17 percent in early morning trading on Monday.

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