Playboy Enterprises Agrees to Go Private
(Press Release) CHICAGO, January 10, 2011—Playboy Enterprises, Inc. today announced that it has entered into a definitive agreement with Icon Acquisition Holdings, L.P., a limited partnership controlled by Hugh M. Hefner, to take the company private for $6.15 per share.
The $6.15 price represents a 18.3 percent premium over the closing price Friday, January 7, 2011, of PLA and a 56.1 percent premium over the closing price on July 9, 2010, the last trading day before the proposal was first announced.
The purchaser, Icon Acquisition Holdings L.P., has obtained equity commitments for the transaction from an affiliate of Rizvi Traverse Management LLC (Rizvi Traverse) and a debt commitment for the transaction from affiliates of Jefferies & Company, Inc.
As previously reported, PEI's Board of Directors formed a Special Committee of independent directors, which subsequently evaluated Mr. Hefner's proposal, determined to proceed with and negotiated the transaction, and recommended that PEI's Board of Directors approve the agreement. Last night, the Board, acting in part on the Special Committee?s approval and recommendation, unanimously approved the agreement and resolved to recommend the transaction to PEI's stockholders.
Mr. Hefner said: "With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company. The brand resonates today as clearly as at any time in its 57-year history. 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."
Sol Rosenthal, Chairman of the Special Committee of Playboy's Board of Directors, said: "The Special Committee and the Board have determined that the transaction is advisable, fair to and in the best interests of the Company's public stockholders."
Playboy CEO Scott Flanders will remain with the company in his current position and maintain a significant equity investment in Playboy. "Our strategy is to transform Playboy into a brand management company," Flanders said. "This transaction will advance our efforts by strengthening our balance sheet and streamlining our operations, while creating opportunities to participate in new ventures. I am excited about the future, and I look forward to working with our new partners as we guide Playboy into the next era."