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Playboy Enterprises May Go Private (NYSE: PLA)

Submitted by Mike Swanson on Mon, 2010-07-12 09:51.

It looks like Playboy is about to cover up. Publicly traded Playboy Enterprises announced today that it received a proposal to go private for $5.50 per share in cash. The proposed deal came from Rizvi Traverse Management LLC and Hugh Hefner who looks to buy the publicly stock that he doesn't own. The letter of intent says that the Rizvi company has been in contact with Hugh Hefner about this deal and several major lenders in regard to financing it.

Shares of Playboy stock are up over 34% today right off of the opening bell on this news.

Playboy stock has declined from a trading price of $15 a share in 2005 to all of the way down to $2.30 a share last year as the stock got hit during the great bear market and financial collapse of 2008. Over the past year publishing companies including newspaper and magazines have suffered from a drought in advertising revenue and had been hit by falling subscription numbers.

There have been merger and buyout talks in the past year with other potential suitors of Playboy so today’s news is not unexpected. Last year Iconix Brand Group broke of buyout talks with Playboy while Oak Hill Patners denied media reports that it was looking to buy the company.

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