Hugh Hefner taking Playboy private

chart_ws_stock_playboyenterprisesinc.top.pngShares of Playboy surged in July after Hugh Hefner first proposed taking the company private. By Aaron Smith, staff writer


NEW YORK (CNNMoney) -- Playboy founder Hugh Hefner signed an agreement to take his publicly-traded company private, the company said Monday.

Hefner, who already owns a substantial amount of the company's shares, has entered an agreement with Icon Acquisition Holdings to pay $6.15 per share for the portion of Playboy Enterprises that he does not own.

This would be an 18% premium from Playboy's (PLA) closing price of $5.20 per share on Friday. At the start of trading on Monday, shares surged 17%.

"With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company," said Hefner, who created the pornographic magazine with its iconic bunny logo 57 years ago.

Hefner, through his trusts, owns 69.5% of the class A shares and 27.7% of the class B shares. He expects to close the deal by Jan. 21.

This ends an ongoing bidding war with another porn icon, Penthouse. FriendFinder Networks, the owner of Penthouse magazine, offered to buy Playboy for $210 million in July, 2010. At the time, that translated to $6.24 per share.

That offer was in response to Hefner's original plan to purchase the outstanding shares for $5.50 each, which valued Playboy at $185 million.

Playboy has been struggling with profitability in recent years, given the proliferation of free, online pornography. To top of page

Index Last Change % Change
Dow 24,964.75 -254.63 -1.01%
Nasdaq 7,234.31 -5.16 -0.07%
S&P 500 2,716.26 0.00 0.00%
Treasuries 2.89 0.02 0.56%
Data as of 5:13pm ET
Company Price Change % Change
General Electric Co 14.74 -0.31 -2.06%
Bank of America Corp... 31.93 -0.04 -0.13%
Walmart Inc 94.11 -10.67 -10.18%
Advanced Micro Devic... 12.02 0.20 1.69%
Micron Technology In... 44.90 0.69 1.56%
Data as of 4:15pm ET
Sponsors

Sections

If Congress fails to reach an immigration deal, some communities could lose Dreamers who are firefighters, nurses, emergency care workers and teachers. More

Cybersecurity experts at FireEye expect "very aggressive" activity soon by a North Korean group of hackers who have been spying on South Korea's biggest multinationals. More

Since your kids never see cash, here's how help them -- and you -- be savvy with money they can't hold. More