Hefner’s offer for Playboy is accepted
Playboy’s founder has successfully bid for control of the company he began over fifty years ago. In partnership with Icon Acquisition Holdings LP, Hefner has bought out the remaining shares of Playboy Enterprises Inc., and intends to take the company private.
Hefner is Playboy’s largest shareholder, with 70% of the voting shares and 28% of the non-voting stock. His offer valued the company at $207 million. The Playboy board committee agreed to let Hefner lead the company through the digital age, denying a higher offer from FriendFinder Networks, owner of longtime rival Penthouse magazine. The board released a statement that Hefner’s bid is in the company’s best interests.
Hefner is the magazine’s editor-in-chief and chief creative officer. Scott Flanders will remain Playboy’s CEO, and will keep an equity investment in the company. He replaced Hefner’s daughter, Christie, in 2009.
Playboy is Hefner’s baby
Hefner began the Chicago-based company in 1953, and the magazine had its heyday in the 1970s. Playboy went public in 1971 and, the following year, one issue hit a circulation of 7.2 million.
Playboy has battled other men’s magazines for readership. With the introduction of the internet, the printed Playboy couldn’t compete with websites that offered racy content for free.
Declining sales forced several rounds of layoffs since 2008, and revenue fell 7% in the third quarter last year.
The transformation of Playboy
In order to combat their publishing and television revenue losses, Hefner will focus on making Playboy a “brand management” company. Through licensing the Playboy name and trademark bunny ears for a variety of products like clothing and accessories, the company will generate income off of its image.
“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,” said Hefner.