Beate Uhse to Take 50% Stake in Penthouse
German sex-toy shop operator Beate Uhse AG will share ownership with Luis Molina, the Mexican investor who invested in Penthouse International Inc., which owns General Media Inc. General Media is expected to emerge from Chapter 11 bankruptcy protection next month.
In the deal, Beate Uhse will pump $38 million into New York-based Penthouse, which also owns adult-site credit card processor iBill.
Beate Uhse sells erotic lingerie sex toys, and videos through its two mail-order catalogs, Beate Uhse and Pabo, and its chain of more than 200 sex shops in nine countries.
Beate Uhse also offers adult content through its website operations and a telephone sex network in Europe. It owns 49 percent of Beate-Uhse TV.
Beate Uhse, with nearly 1,400 employees, has a wholesale manufacturing business with two latex product plants in Germany and the Netherlands.
The Beate Uhse Erotik-Museum was opened in 1996 by Beate Rotermund — the company's late founder and former chairwoman — and is among Berlin's top tourist attractions.
The Flensburg, Germany-based public company had $333.4 million in revenue in 2003.
In May, Penthouse said its public shares — which rose 26 percent Monday to 18.9 cents a share — would no longer be traded on the Over-the-Counter Bulletin Board and that its stock had been relegated to the Pink Sheets, a stock quotation service that handles high-risk ventures and isn't regulated by the Securities and Exchange Commission.
Penthouse, which had $53 million in revenue in 2002, said the move to the Pink Sheets was due to a late filing with the SEC. The adult entertainment giant said that was caused by "a number of factors," including the company's acquisition this year of iBill.
The Justice Department is investigating Deerfield Beach, Fla.-based iBill in an antitrust probe along with two other large adult processors. The probe is seeking to determine whether the two competing online adult payment providers, as well as iBill, collaborated to set fees and if so, whether practices are anti-competitive.
Penthouse told XBiz in May that it believes potential legal claims relating to iBill are in the tens of millions of dollars.
IBill was acquired by Penthouse in March from InterCept Inc. through its Media Billing LLC division. The company said it learned of the federal investigation after closing the deal.