Since the DomainFest party is once again for the 3rd year going to be held at the Playboy Mansion, I keep an eye on the stock and today Playboy announced that it would be going private.
Here is the press release:
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% premium over the closing price Friday, January 7, 2011, of PLA and a 56.1% premium over the closing price on July 9, 2010, the last trading day before the proposal was first announced.
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.”
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.”
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% 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.
Closing of the transaction is subject to customary conditions but is not subject to a financing condition. It is expected that the transaction will be completed before or shortly after the end of the first quarter of 2011.
Economy is bouncing back (up) hard and fast this quarter and this year – this news is just another example.
– TBC
In other words, equity capital holders don’t finance buyouts at 18% premiums in the face of a contracting economic environment.
Time to pick up the pace of our domain buying…2nd half of this year and beyond could seem like the roaring ’90’s again…for at least a little while anyway.
– TBC
I myself could care less about what playboy wants to do or if someone is cashing out.
This does bring me to another question (off topic).
@5D.TV
What exactly is 5D TV?
I know that 3D is three dimensional which gives LENGTH, WIDTH, and DEPTH. For a forth dimension you can add in TIME but I am lost when it comes to the 5th dimension.
Maybe it means something outside of dimension. I am just curious, because its a nice name and I just want to try to get ahead of any future trends is spotted. Maybe you know something I do not.
Cheers
3D Viewing +
sense of smell, taste, or feel (4th dimension…Disney World has had 4D shows for years) +
Social aspect (i.e., social TV, which is becoming very popular worldwide right now) =
5D
very good news! but, will him “share” also his Playmates? …
@Slate,
Obviously, since the technology isn’t there yet, we don’t intend to develop 5D.TV for several years. Our first foray into social-tv will be with Soc.TV — if all goes as planned, Soc.TV should launch in early 2012.
– TBC
Nice….
Congratulations on the pending launch of Soc.TV.
I was just seeing if maybe you knew something that I did not.
Cheers and all the best
$200 million for the Playboy brand is a good deal, a smart business team can easily grow and sell it for $1 Billion 2-3 years from now
Besides the par-tay, I’m sure you keep an eye on the stock…. for the articles…
@Einstein,
If it cash-flows well, they’d be stupid to sell even at a billion 2-3 years from now. Cap-gains will smash their net, and even after that, where are they going to park their money (safely) to get comparable gains to what they were making?
Point is, I foresee MANY small-to-mid sized public companies ($100m-$3B) going private this year and next…the economic environ is ripe for it.
– TBC
Protip: This isn’t “good news” for Playboy.
“If it cash-flows well, they’d be stupid to sell even at a billion 2-3 years from now. Cap-gains will smash their net, and even after that, where are they going to park their money (safely) to get comparable gains to what they were making?”
They are a gazillion ways to avoid taxes.
They could also sell to a bigger media company and take equity instead if they can really make 3-5 times their investment. But at $200 million, Playboy, as an international brand, is a steal. There’s more to life than porn, one could even imagine a Viagra like pill endorsement /production, casinos etc etc.
and Penthouse wants to create the first 3D p0rn channel
crunchgear.com/2011/01/10/penthouse-to-create-first-3d-porn-channel/