Hefner, competitor want to buy Playboy

Founder offer values Playboy Enterprises at $185 million

NEW YORK -- Shares of Playboy Enterprises jumped Monday following news that founder Hugh Hefner has proposed to buy the rest of the company that he doesn't already own to take the firm private.

FriendFinder Networks, a privately-held competitor in the adult entertainment space that owns the Penthouse brand, also expressed interest in Playboy, which could lead to a bidding showdown.

Playboy said Hefner offered to buy it in a deal valued at $185 million with financing help from a private equity firm called Rizvi Traverse Management. He offered $5.50 a share, a 40% premium from the stock's Friday close. The founder currently owns 69.5% of Playboy's class A stock and 27.7% of its class B stock.

FriendFinder Networks CEO Marc Bell told The Hollywood Reporter that he is looking at a potential bid and hopes to have news on that front within days. "There is a lot of potential value locked up here," he said about Playboy, particularly lauding its digital media assets and brand. "The brand is very strong and has real potential."
Asked about Hefner's voting power and how it would affect a FriendFinder bid, Bell said that the founder has "a fiduciary duty to minority (share)holders and will have to listen to them."
 
Playboy shares closed up 40.9% at $5.55 after hitting a 52-week high of $5.66 intra-day.
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