Playboy Enterprises (PLA) Quietly Seeks A Buyer
The NY Post reported that Playboy Enterprises (NYSE: PLA) is being quietly shopped around for $300 million, which was first reported by Media Ink. However, the highly capitalized private-equity shops like Apollo Capital Partners and Providence Equity Partners have not shown too much interest in PLA.
Just like physical retailers' business models being hurt by the Internet, Playboy's subscription sales have dropped dramatically as once-subscribers of the magazine, now can just view the same material with just a click of the mouse.
Playboy's market capitalization stands around $100 million and no buyer has been willing to pay the substantial premium that it would take to persuade Hugh Hefner to sell the company he founded.
The NY Post said that Playboy is seeking such a high premium so Hef has enough to maintain his lavish lifestyle.
"Everyone says he'll never let go, that he'll take it with him to the grave," said one source.
Hef controls about 70% of the voting stock, and as of March 31, the second-biggest shareholder was Wells Capital, which held a 10% stake. Fidelity is third at 7%.
Playboy has been ferociously trying to cut costs. In its most recent quarter, Playboy lost $13.7 million, compared with a loss of $4.2 million a year ago. Revenue fell to $61.6 million in the quarter from $78.5 million a year ago.
Christie Hefner, Hef's daughter, stepped down as CEO in January and formally left the board at its annual meeting last week, severing her ties.
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