Hugh Hefner Places Bid To Take Playboy Private

By on July 12, 2010

Hugh Hefner, Playboy Enterprise founder and controlling shareholder, has offered to purchase all the remaining outstanding shares of Playboy that he does not own.   Mr. Hefner owns 69.5% of Playboy’s Class A stock and 27.7% of its Class B shares.   The offer is $5.50 a share for both classes of stock, an approximately 40% premium to the Class B stock’s Friday closing price.  Shares for the Class B stock had already been up over 23% so far in 2010.

David Bank, an analyst with RBC Capital Markets, expressed his concern on the offer price.

“Given what the board [of directors] knows about the timing and the benchmarks of the turnaround that’s in process, the attractiveness of a $5.50 offer to the board might look a lot different than it does to us.  It might look much less compelling.”

Milberg LLP has initiated an investigation into whether Hugh Hefner’s bid is fair and whether the Board of Directors breached their fiduciary duties by not acting in all of Playboy’s shareholders’ best interests.

PLA 5 year chart - moneycentral.msn.com

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