Playboy Enterprises Inc. said Tuesday its board of directors has formed a special committee to consider founder Hugh Hefner’s proposal to buy out the rest of the company.
The committee will consist of attorney Sol Rosenthal, who will serve as its chairman, and Playboy director Shing Tao. Rosenthal is a counsel at international law firm Arnold & Porter, while Tao is chairman and chief investment officer of Pacific Star Partners, a private investment group.
Hefner offered on July 9 to buy the roughly 30 percent of Playboy’s outstanding shares that he doesn’t already own for $5.50 each, and take the company private in a deal valuing Playboy at $185 million. A few days later, Penthouse magazine owner FriendFinder Networks Inc. made a formal, competing bid for the Playboy empire worth $210 million, but any such deal would require Hefner to agree to sell his nearly 70 percent stake.
The company, which is headquartered in Chicago, said Tuesday that no decisions have been made about Hefner’s offer, and there’s no guarantee any agreement will be reached.
Playboy’s stock price has tumbled since hitting a peak in 1999 of more than $32, closing Tuesday up 2 cents at $5.37.
The company’s namesake magazine has struggled with competition from the Web, losing readers and advertisers. It has tried to make up for a declining print business by licensing its brand and the iconic bunny ears for consumer products. It recently released its June edition equipped with 3-D glasses, hoping to capitalize on the popularity of 3-D movies such as “Avatar.”
Hefner has said he worries about the editorial direction of the magazine and its legacy. At 84, he still serves as creative director and editor-in-chief.
