Fusion Corporate Partners

The $6.15 price represents a 18.3% premium over the closing price Friday, January 7, 2011, of PLA and a 56.1% premium over the closing price on July 9, 2010, the last trading day before the proposal was first announced.  

The purchaser, Icon Acquisition Holdings L.P., has obtained equity commitments for the transaction from an affiliate of Rizvi Traverse Management and a debt commitment for the transaction from affiliates of Jefferies & Company, Inc.

Mr. Hefner said:  “With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company.  The brand resonates today as clearly as at any time in its 57-year history. I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world.”  

Sol Rosenthal, Chairman of the Special Committee of Playboy’s Board of Directors, said:  “The Special Committee and the Board have determined that the transaction is advisable, fair to and in the best interests of the Company’s public stockholders.”  

Playboy CEO Scott Flanders will remain with the company in his current position and maintain a significant equity investment in Playboy.  “Our strategy is to transform Playboy into a brand management company,” Flanders said.  “This transaction will advance our efforts by strengthening our balance sheet and streamlining our operations, while creating opportunities to participate in new ventures.  I am excited about the future, and I look forward to working with our new partners as we guide Playboy into the next era.”

Under the terms of the transaction, the purchaser will offer to acquire all of PEI’s outstanding shares of Class A voting (PLAA) and Class B non-voting (PLA) common stock that Mr. Hefner and his affiliates do not own for $6.15 per share in cash.  Through Mr. Hefner’s trusts, Mr. Hefner controls approximately 69.5% of the Class A shares and 27.7% of the Class B shares.  In connection with the transaction, Mr. Hefner has agreed to transfer all shares to the purchaser and not to tender such shares in the offer.  

The purchaser expects to commence the tender offer no later than January 21, 2011.  

Lazard is acting as financial advisor and Skadden, Arps, Slate, Meagher & Flom is acting as legal counsel to Playboy Enterprises. Raine Securities LLC is acting as financial advisor and Kaye Scholer LLP is acting as legal counsel to the Special Committee. Moelis & Company LLC is acting as financial advisor and Munger, Tolles & Olson LLP is acting as legal counsel to Mr. Hefner.  Jefferies & Company, Inc. is acting as financial advisor and Sheppard, Mullin, Richter & Hampton LLP is acting as legal counsel to Rizvi Traverse.

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