Playboy Enterprises Agrees to Go Private
Ben Kohn, managing partner of Rizvi Traverse's Los Angeles office, added: "Playboy is an iconic company with a singular, storied brand and history. We are pleased to partner with Hugh Hefner and the current management team to be a part of a transaction that will enable Playboy Enterprises to continue to execute on its strategy. This would bring an end to a period of uncertainty for the company and provide the right ownership structure to develop the business."
Under the terms of the transaction, the purchaser will offer to acquire all of PEI's outstanding shares of Class A voting (PLAA) and Class B non-voting (PLA) common stock that Mr. Hefner and his affiliates do not own for $6.15 per share in cash. Through Mr. Hefner's trusts, Mr. Hefner controls approximately 69.5% of the Class A shares and 27.7 percent of the Class B shares. In connection with the transaction, Mr. Hefner has agreed to transfer all shares to the purchaser and not to tender such shares in the offer.
The purchaser expects to commence the tender offer no later than January 21, 2011. The tender offer will expire 20 business days after it commences subject to extensions permitted by the merger agreement.
In connection with the transaction, Plainfield Asset Management LLC (Plainfield) and certain of its affiliates, which together own approximately 19.05 percent of the Class A shares, have committed to the company to tender such shares in the offer.
The transaction is subject to a non-waivable "majority of the minority" condition, pursuant to which more than 50 percent of the total Class A and Class B shares outstanding on the date of purchase (not including the shares transferred by Mr. Hefner and other shares that will be contributed to the purchaser) must be validly tendered and not withdrawn in the offer. If, at the expiration of the tender offer, the purchaser owns at least 90 percent of PEI's Class A shares (including the shares transferred by Mr. Hefner and Plainfield and shares the purchaser may buy from the company under a "top up" option) (referred to as the "threshold condition"), the "majority of the minority" condition is satisfied and all other conditions to closing are satisfied, then the purchaser will proceed to complete the acquisition of PEI through the short-form merger procedure under Delaware law.