Exclusive: Playboy explores deal to return to the stock
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[September 19, 2020] By
Joshua Franklin and Mike Spector
(Reuters) - Playboy magazine owner Playboy
Enterprises is exploring options that include going public through a
merger with a blank-check acquisition company, according to people
familiar with the matter.
A deal with a blank-check firm - referred to on Wall Street as a special
purpose acquisition company (SPAC) - would result in Playboy's return to
the stock market, nine years after it went private in a $207 million
deal led by its late founder Hugh Hefner and private equity firm Rizvi
Since then, the company's print sales have fallen further. The COVID-19
pandemic compounded its challenges, leading Playboy earlier this year to
stop printing the magazine, ending a nearly seven-decade run on
newsstands that began in 1953 with a debut issue featuring Marilyn
Playboy is working with an investment bank to engage in discussions with
a potential SPAC buyer, the sources said. A deal, if one is reached,
would give Playboy access to money it needs to finance growth
initiatives that it otherwise might not be able to tap, one of the
sources said. The sources spoke on condition of anonymity because the
talks are confidential.
The sources cautioned that it is possible no deal will materialize. A
representative for Playboy declined to comment. Rizvi Traverse Chief
Investment Officer Suhail Rizvi did not immediately respond to requests
Hefner, who founded Playboy in 1953, died in 2017 at the age of 91. His
family sold a 35% stake in Playboy to Rizvi Traverse for $35 million in
2018, according to PitchBook data.
The company had explored a sale in 2016, Reuters reported at the time.
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Playboy bunnies pose during the opening ceremony of the Playboy
Cancun casino December 4, 2010. REUTERS/Henry Romero
Playboy magazine's rabbit silhouette became one of the best known logos in the
world and the "bunny" waitresses in Hefner's Playboy nightclubs were instantly
recognizable in their low-cut bathing suit-style uniforms with bow ties, puffy
cotton tails and pert rabbit ears.
In recent years, Playboy has expanded beyond its media business to refashion
itself as a lifestyle brand. It has also licensed its brand and logo to others.
Playboy did away with full-frontal nudity starting in its March 2016 issue, but
reversed course a year later.
A SPAC is a shell company which raises funds in an initial public offering (IPO)
with the goal of acquiring a private company. The acquired company then becomes
publicly traded as a result. Such vehicles have emerged in 2020 as an
increasingly popular route to the public markets over a traditional IPO.
Many of the most successful SPAC acquisitions this year have been for
high-profile consumer brands, such as Diamond Eagle Acquisition Corp's purchase
of sports betting platform DraftKings Inc <DKNG.O>, or for companies in emerging
industries like electric vehicles and plant-based food.
(Reporting by Joshua Franklin in Boston and Mike Spector in New York; Additional
reporting by Anirban Sen in Bangalore; Editing by Tom Brown and Jonathan Oatis)
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