Hugh Hefner, the 84-year old founder of legendary girlie mag Playboy, sparked a battle over his graying empire yesterday when he offered to take his adult entertainment company private in a deal that values the franchise at just $185 million.
Hefner told Playboy Enterprises he wants to buy all the stock he doesn’t already own for $5.50 a share — a more than 30 percent premium over the previous closing price — in a deal that will cost him $123 million.
The announcement by Hefner both goosed the stock of the embattled company and attracted a bid by rival and equally embattled adult monthly Penthouse. Playboy’s stock swelled on the news, rising $1.61, or 41 percent, to close at $5.55 a share, above the Hefner offer price and its highest level in two years.
Marc Bell, CEO of FriendFinder Networks, which owns Penthouse, said he would like a piece of the 57-year-old company.
“We feel that it’s probably worth a little bit more,” Bell told The Post. “We are seeing a real opportunity here.”
Bell said he expects to pounce on the men’s entertainment empire “in the next day or two,” but declined to reveal his price for the company famous for scantily clad women in bunny ears.
In spite of all the excitement, Wall Street watchers expressed skepticism that the bidding war between the two companies will get off the ground given the tight grip the randy Hefner retains on the company he founded in 1953.
“Do I think a real bidding war is going to erupt? Probably not,” said David Bank, an analyst with RBC Capital Markets.
Hefner owns close to 70 percent of the Class A shares, which have voting power, and close to 28 percent of the Class B non-voting shares. Hefner also firmly stated that he’s not interested in a sale or merger of Playboy, which has been suffering from shrinking revenues in recent years.
Some Wall Street watchers said they suspect Hefner’s merely looking to smoke out suitors. Other people speculated that Penthouse is simply using the opportunity to tease Hefner by saying his bid is insufficient to please shareholders.
Bell rejected any notion that he isn’t serious about making a run for Playboy.
“It’s one of those things where everything just makes sense at some point in time. [Hefner] opened the door,” Bell said, referring to Hefner’s going-private offer.
In the world of easily accessible Internet porn, Playboy has been suffering from dwindling ad sales and growing competition. In June, Playboy CEO Scott Flanders announced downsizing plans that will lead to a $3 million restructuring charge in the second quarter.
The company’s centerpiece monthly magazine has seen circulation and advertising erode over the past decades, and Playboy is saddled with a pile of debt. Still, the bunny logo is one of the most recognizable brands in the world, and Hefner has been aggressively pursuing licensing deals for the bunny mark to help spark revenue.