The Series B round for Witherspoon’s Draper James brand was led by San Francisco-based Forerunner Ventures.
Just days after Playboy founder Hugh Hefner offered a deal valued at $185 million to buy all of the company, FriendFinder Networks Inc., publisher of Penthouse, has submitted a higher offer of $210 million.
Company founder and one-time editor Hugh Hefner isn’t the only party interested in purchasing Playboy Enterprises Inc.
On July 15, just three days after Hefner offered Playboy’s board of directors a deal valued at $185 million to buy the company and take it private, FriendFinder Networks Inc. has submitted a higher offer of $210 million to acquire all of Playboy and its related assets.
FriendFinder operates various social media and entertainment web sites and also is the publisher of Penthouse, a men’s lifestyle publication that competes with Playboy’s print edition and Playboy.com.
“We believe that we can structure an offer to acquire Playboy Enterprises, Inc. in a transaction worth over $210 million of equity value, which could increase based on our receipt and review of certain due diligence information including updated financial data,” FriendFinder CEO Marc Bell wrote in a letter to Playboy’s board of directors. “We would propose an arrangement where we would partner with Mr. Hefner in our efforts to drive shareholder value. We envision that following the completion of the proposed transaction, Mr. Hefner would retain editorial control of Playboy Magazine and would be entitled to reside in the Playboy Mansion.”
Playboy says it has received both offers and is giving each due consideration, the company says. No timetable for any sale has been set.
On July 12, Hefner, who already owns about 69.5% and 27.7%, respectively, of Playboy’s common and preferred stock, offered to purchase all of the company’s outstanding shares for $5.50 per share in cash. “Hefner advises the board of directors that out of his concerns for, amongst other matters, the Playboy Enterprise brand, the editorial direction of the magazine and Playboy’s legacy, Hefner is not interested in any sale or merger, selling Hefner's shares to any third party or entering into discussions with any other financial sponsor for a transaction,” the company says.
In recent years, Playboy, which sells online at Playboy.com and ShopTheBunny.com, has been looking to shore up declining revenue, including e-commerce. In the first quarter ended March 31, Playboy, No. 268, in the Internet Retailer Top 500 reported:
- E-commerce sales were $8.3 million, a 10.8% decline from $9.3 million in the prior year quarter.
- Total sales were $52.1 million, down by 15.4% from $61.6 million in the first quarter of 2009.
- Net loss was $1.0 million, compared to a net loss of $13.7 million in the same period last year.
Playboy has yet to release its second quarter financials. In February FriendFinder, which says it owns over 30,000 web sites with over 350 million registrants in more than 180 countries, in February called off plans for an initial public offering that the company says could have raised up to $240 million in new capital for acquisitions and business development.