Two buyers in talks to acquire Playboy

According to sources, who claim to be in the loop but refused to be identified, both the companies have been talking to the Playboy’s management since a year and are hopeful of acquiring the entertainment business for more than $300 million.

Speculations that the company could be acquired have been there since February when the company’s interim Chief Executive Jerry Kern said that Playboy was open to all selling options.

Both the potential bidders have refused to comment on the latest developments.

Playboy’s shares soar amid buyout talks
Though it is yet not clear who will take over the company, the news of serious suitors seeking acquisition of struggling company sent its shares soaring 66 percent on Thursday. Stock price closed at $4.07, up $1.21 or 43 percent. The company’s market capitalization on Wednesday was $136.3 million.

Reeling under the effects of the current economic slowdown, the Chicago-based company has witnessed a slump in its various business divisions like, adult pay television, print and digital content.

Its revenue has plummeted 44 percent to $9.45 million in the first quarter this year. In order to cut costs, the company has cut the magazine’s circulation to 1.5 million from 2.6 million.

Potential bidders evaluating all possibilities
The final decision to sell the company rest with 83-year-old Hugh Hefner, Playboy’s founder, who controls 70 percent of the company’s shares. The buyer will have to convince Hefner to give up control of the company, which he started 56 years ago.

Iconix owns brands like Candie’s Danskin, Joe Boxer, London Fog, etc. and has recently acquired Marc Ecko. In order to diversify its brand portfolio it is now evaluating all possibilities to acquire the company.

On the other hand, Griffiths is working with San Francisco private-equity firm Golden Gate Capital to strike a deal with Playboy.