Hef Offers to Take Playboy Private [Updated]

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Photo: Ethan Miller/Getty Images

Octogenarian Hugh Hefner has made an unexpected bid to take Playboy Enterprises private. Hef offered to buy the 30 percent of shares he doesn’t already own for $5.50 a share, a 40 percent premium. Playboy stock skyrocketed to its highest level in two years, and the stock market settled back to enjoy what will be a lively and double-entendre-filled bidding war between Hef and the corporate owners of Penthouse, Playboy's shrink-wrapped rival on the top shelf of airport newsstands everywhere.

Analysts are struggling to determine whether Hef knows something they don’t.


“It’s almost a surreal development,” said RBC Capital Markets media analyst David Bank. “The simplest explanation is that the company is worth a lot more than it’s trading for, and that Hef can see that; we can’t.”

But Reuters Breakingviews notes:


For half a century the 84-year-old founder of Playboy magazine has
cultivated the image of a man who lives life to its libidinous fullness.
So it’s reasonable to expect that Hef, now in his twilight, will
succeed in having his way with yet one more constituency — his
shareholders.

FriendFinder Networks, which owns Penthouse, told Bloomberg that it will submit its own bid on Tuesday.

Playboy’s own board reportedly didn’t know the bid was coming in until Monday morning, according to a company spokeswoman. Though, really, is anyone that surprised? We're talking about a man who once said “If I sold it, my life would be over.”


Hefner Offers to Take Playboy Private [NYT]