Playboy Agrees to Go-Private Transaction at $6.15 per Share

CHICAGO — Playboy announced today that it has entered into an agreement with Icon Acquisition Holdings, L.P., a limited partnership controlled by Hugh Hefner, to take the company private for $6.15 per share.

The $6.15 price represents an 18.3 percent premium over the closing price on Jan. 7, of PLA and a 56.1 percent premium over the closing price on July 9, 2010, the last trading day before the proposal was first announced.

The purchaser, Icon Acquisition Holdings L.P., has obtained equity commitments for the transaction from an affiliate of Rizvi Traverse Management (Rizvi Traverse) and a debt commitment for the transaction from affiliates of Jefferies & Company, Inc.

“With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company,” Hefner said.

“The brand resonates today as clearly as at any time in its 57-year history. I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world."

As previously reported, Playboy’s board of directors formed a special committee of independent directors, which subsequently evaluated Hefner's proposal, determined to proceed with and negotiated the transaction, and recommended that the board approve the agreement.

Last night, the board unanimously approved the agreement and resolved to recommend the transaction to Playboy stockholders.

"The special committee and the board have determined that the transaction is advisable, fair and in the best interests of the company's public stockholders,” said Sol Rosenthal, chairman of the special committee of Playboy's board of directors.

Playboy CEO Scott Flanders will remain with the company in his current position and maintain a significant equity investment in Playboy.

"Our strategy is to transform Playboy into a brand management company," Flanders said.

"This transaction will advance our efforts by strengthening our balance sheet and streamlining our operations, while creating opportunities to participate in new ventures. I am excited about the future, and I look forward to working with our new partners as we guide Playboy into the next era."

Under the terms of the transaction, the purchaser will offer to acquire all of Playboy’s outstanding shares of Class A voting (PLAA) and Class B non-voting (PLA) common stock that Hefner and his affiliates do not own for $6.15 per share in cash.

Through Hefner's trusts, he controls approximately 69.5 percent of the Class A shares and 27.7 percent of the Class B shares. In connection with the transaction, Hefner has agreed to transfer all shares to the purchaser and not to tender such shares in the offer.

The purchaser expects to commence the tender offer no later than Jan. 21. The tender offer will expire 20 business days after it commences subject to extensions permitted by the merger agreement.