Hugh Hefner's efforts to take full control of Playboy Enterprises Inc were buoyed by the latest results of the Chicago-based publishing company.
Although revenues at Playboy dropped from $62 million for Q2 2009 to $56 million for the same period this year, net losses shrunk to $5.4 million from $8.7 million in 2009. The company's improved financial position was helped by the closing of the New York office and job cuts.
Strong growth in the licensing group business, which reported a 35% increase in income, was offset by a continued decline in revenues for the group's print and digital sector, which lost $1.2 million.
Last month saw Hefner bid to take Playboy fully private when he offered $5.50 per share in cash to acquire all outstanding Class A and Class B shares he does not already own. (Continue reading here) The bid values the company at $185 million.
His bid was quickly followed by another offer from Friend Finder Networks, which owns rival magazine Penthouse. The Friend Finder offer is a 10% premium on the Hefner bid, valuing the company at $210 million. (Continue reading here)
The results announcement comes just days after Playboy said it has established a special committee to consider its future.As Hefner controls 70% of the company's Class A voting stock, a successful bid would need to have his support.
US-based Playboy was founded by Hefner in 1953 and he is still very much part of the brand. Along with his 70% of Class A stock, he has a 30% holding of Class B common stock in the company, which went public in 1971. Back in the 1970s circulation of the magazine was close to 7 million compared with around 1.5 million today.
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