By Kevin McCauley
Playboy Enterprises announced today that it has agreed to be taken private by founder Hugh Hefner in a deal worth $207M.
The board nixed a competing offer by FriendFinder, parent company of Playboy's arch-rival, Penthouse.
Hefner, 84, launched Playboy in 1953. Circulation, which peaked at 7.2M in 1972, has been on a downward spiral. The company cut its guaranteed rate base from 2.6M to 1.5M last year.
The deal, according to Hefner, enables Playboy to "come full circle, returning to its roots as a private company." Despite the sales decline, Hefner believes the "Playboy brand “resonates today as clearly as at any time in its 57-year history."
Playboy CEO Scott Flanders will remain in the top spot and take an equity investment in the deal. He sees an opportunity to strengthen Playboy's balance sheet, streamline operations and invest in new ventures.
Hefner's $6.15 per-share offer represents an 18.3 percent premium over the stock's Jan. 7 close. Hefner proposed the offer July 10, and a special committee of the board has now determined the buyout is “fair to and in the best interests” of Playboy's stockholders.
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