With Beate Uhse Deal Killed, Penthouse Faces Emergency Asset Sale

NEW YORK — In a stunning blow to the Penthouse empire, company executives Friday told a U.S. bankruptcy court judge that they may have to conduct an emergency asset sale next month.

The Friday announcement was linked to a revelation in a status hearing that Flensburg, Germany-based Beate Uhse AG has bailed out of a deal to invest $42.5 million into General Media Inc., the parent of Penthouse, which filed for bankruptcy protection last year.

Beate Uhse’s backing was an essential part of New York-based General Media's proposal to repay more than $40 million in bond debt and about $10 million in unsecured debt.

As a result of the failed deal, General Media executives told the court that the company might have to explore an emergency sale of assets if another arrangement could not be reached.

Calls to General Media officials late Friday were not returned to XBiz.

It is the second time the operator of Europe’s largest chain of sex shops has aborted a deal with General Media. Beate Uhse made a $62 million bid in March for Penthouse and its websites and trademark, but pulled out of the bidding a month later.

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. It also offers adult content through its website operations and a telephone sex network in Europe. It owns 49 percent of Beate-Uhse TV.

General Media’s announcement on Friday also may hinder Penthouse’s planned sale of Deerfield Beach, Fla.-based iBill to Care Concepts I Inc., which agreed to acquire it from Penthouse for $55 million in an all-stock deal that took place last Friday.

IBill, one of the adult industry’s largest third-party processors, averaged 1.2 million transactions per month and completed approximately $330 million in gross transactions in 2003.

With the iBill deal, Penthouse would own nearly 20 percent of New York-based Care Concepts, which owns online auction site iBidUSA.com, as well as Foster Sports Inc., a sports-oriented multimedia company.

The iBill transaction is subject to standard closing conditions as well as the approval of the American Stock Exchange, which preliminarily advised Care Concepts that to maintain its listing on the exchange, it would be required to satisfy criteria for an initial listing giving effect to the acquisition.

IBill was acquired by Penthouse in March from Norcross, Ga.-based InterCept Inc. through its Media Billing LLC division, which purchased the company with $700,000 in cash, $800,000 in a short-term loan and the assumption of $22 million in debt.

Two months ago, iBill said the Justice Department was investigating the company in an antitrust probe along with two other large adult processors.

The investigation 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.

IBill told XBiz in May that it believes potential legal claims relating to iBill are in the tens of millions of dollars. It learned of the federal probe after closing the deal.

The year continues to be stormy for Penthouse International, the parent company of General Media.

In May, Penthouse International said its public shares 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 International, which had $53 million in revenue in 2002, said the move to the Pink Sheets was due to a late filing with the SEC and the company's acquisition of iBill.

Penthouse International shares rose 3 percent Friday in trading to 15 cents.

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Justices Alito, Thomas Invoke Victorian-Era Morality Law, Raising Censorship Concerns

Several national publications reported this week on widespread concern among Free Speech advocates after U.S. Supreme Court Justices Samuel Alito and Clarence Thomas repeatedly invoked during a hearing the infamous segregation-era law the Comstock Act, which was the cornerstone of U.S. censorship of sexual material from the 1870s until the 1970s.

TeamSkeet Releases 1st Installment of 'Ripe for the Taking'

TeamSkeet has released the first installment of its latest feature, "Ripe for the Taking," starring TeamSkeet March AllStar Scarlett Alexis.

LELO Launches 'Masturbitter' Craft Beer to Promote Male Sex Talk

LELO has partnered with Great Beyond Brewing Company to launch Masturbitter, a craft beer, to encourage men to discuss sex.

Pineapple Support Appoints Kasey Kei as Brand Ambassador

Pineapple Support has appointed veteran performer and content creator Kasey Kei as its latest brand ambassador.

Nebraska AV Bill Moves Forward Despite Privacy, Free Speech Concerns

Nebraska’s unicameral Legislature has given first-round approval to LB 1092, the state’s version of the age verification bills being sponsored around the country by anti-porn religious conservative activists.

Eva Maxim, Katrina Colt Headline 'Cumming to LA' From Cherry Kiss

Eva Maxim and Katrina Colt star with Vince Karter in 2021 XBIZ Europas Female Performer of the Year Cherry Kiss' "Cumming to L.A.," from Evil Angel.

Performers in Meta Blacklisting Lawsuit Seek to Preserve Antitrust Claims

Adult Performance Artists Guild board officers Alana Evans, Kelly Pierce and Ruby have informed a California court that, although they want to drop their lawsuit claiming that Meta conspired with OnlyFans to blacklist rival premium fan platforms’ talent, they may still pursue antitrust claims in the future.

Xgen Now Shipping ZOLO's 'Stroke Off' Collection

Xgen Products is now shipping the Stroke Off collection of 11 handheld strokers and four masturbators modeled after lifelike body parts.

Nobü Unveils 'Gyrä' Vibrating Grinding Pad

Nobü has introduced the new Gyrä vibrating grinding pad.

Orion Introduces New 3-Motor Vibrator From 'Sweet Smile' Line

Orion Wholesale has debuted the new three-motor RC G- & P-Spot Vibrator from its Sweet Smile line.

Show More