Hefner, who founded the magazine in 1953 and had Marilyn Monroe as the first centerfold, owns 69.5% of PEI's Class A common stock and 27.7% of PEI's Class B common stock. According to the proposal letter, Hefner has had discussions with Rizvi Traverse Management LLC, which had contacted major lenders regarding potential financing. They are highly confident ample financial resources will be available to complete the transaction, so the definitive agreements would not contain a financing contingency.
The company's release gives a clue as to Hefner's possible motives. "[O]ut of Hefner's concerns for, amongst other matters, the PEI brand, the editorial direction of the magazine and PEI's legacy, Hefner is not interested in any sale or merger of PEI."
The board of directors has not made a decision regarding the proposal yet. And now there could be much more to consider. Just hours after the Playboy announcement, The Wall Street Journal reported that Penthouse parent company FriendFinder Networks also plans to make an offer.
Playboy is one of the most recognized and popular consumer brands in the world, the company says, with its famous rabbit wearing a tuxedo bow tie appearing on a wide range of consumer products in more than 150 countries.
While Playboy's shares soared Monday, they have never returned to the highs set at the end of the last decade. But in the past year, with major restructuring efforts underway, shares have managed to recover from lows set in 2008.
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