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ADULT PROPOSITIONS: Hugh Hefner would like his magazine back, but he may have to outbid Penthouse’s owners to get it. Playboy Enterprises Inc. said on Monday that its 84-year-old founder and current chief creative officer has floated a proposal to take the Chicago-based company private after nearly 40 years as a public venture. To complete the deal, Hefner would partner with private equity firm Rizvi Traverse Management to offer Playboy stockholders $5.50 a share in cash — a nearly 40 percent premium on Friday’s closing price of $3.94 a share — for all outstanding shares he does not own. Hefner currently holds 69.5 percent of the firm’s Class A shares and 27.7 percent of its Class B shares. The offer values the company at about $185 million, but could have competition as early as today. Shortly after Playboy disclosed Hefner’s proposal, Marc Bell, president and chief executive officer of Penthouse magazine parent FriendFinder Networks Inc., said his company is planning its own play for Playboy. “I think that there’s more value there,” Bell said, adding that he saw particular worth in Playboy’s digital properties. In addition to Penthouse, FriendFinder Networks owns a number of subscription-based social media sites that cater to a light years-wide spectrum of Internet interests, from JewishFriendFinder.com and BigChurch.com to AdultFriendFinder.com and Bondage.com. Sensing a potential bidding war, investors pushed shares of Playboy up more than 40 percent Monday to close at $5.55.
Playboy said Hefner made his move out of concern for the editorial direction of the magazine and the company’s legacy. The once robust men’s media empire has struggled in the Internet age as competition from more explicit offerings online has led to losses and forced the company to rely more heavily on licensing revenues. Still, the company has shown a recent willingness to at least try to evolve. It entertained an ultimately scrapped takeover bid from Iconix Brand Group late last year and, in a truly extraordinary move, announced plans for a safe-for-work Web site. — Matthew Lynch