Reuters reported this yesterday: – Playboy Enterprises Inc’s (PLA.N) talks to sell itself to Iconix Brand Group (ICON.O) are facing “serious roadblocks” and it is very likely the two sides will not reach a deal, a source familiar with the matter said.
Efforts are being made to resolve the issues, but the two sides will probably not reach a resolution, the person said on Wednesday, requesting anonymity because the talks have not been made public.
Earlier on Wednesday, Bloomberg had reported that Iconix was pulling out of talks with Playboy. The news sent Playboy shares down 13 percent on the New York Stock Exchange.
Both Playboy and Iconix declined comment on the matter, but Playboy spokeswoman Martha Lindeman said the company had a board meeting on Tuesday.
One of the key issues is that Iconix — which owns and licenses clothing brands such as Candies, Joe Boxer and Rocawear — wants to license the brand and divest or shut down Playboy units.
In addition to its well-known magazine, Playboy also has TV operations and a licensing business based on its ‘Bunny Ears’ logo, an image of a rabbit wearing a bowtie.
No other buyers have expressed interested in Playboy at this time, the source said.
If Playboy cannot seal the deal with Iconix, its future is uncertain amid plunging sales.
Playboy magazine sales, like most businesses in the publishing industry, have suffered in recent years as readers have migrated to the Internet and advertisers have moved more business to websites.
Last month, Playboy Enterprises said it would outsource all its publishing operations except for editorial to American Media Inc in a bid to cut costs and return its namesake magazine to profitability in two years.
Playboy had been open to talking to buyers for months.
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Am I buying the fact there were ever serious talks? No. Not if you recall this story from November 18 when there was an uproar over other Playboy talks:
NEW YORK — Private equity firm Oak Hill Capital Partners said Wednesday that a media report indicating that it is interested in buying the men’s magazine publisher are untrue.
Playboy shares fell 23 cents, or 5.6 percent, to $3.87 in afternoon trading.
Oak Hill said that it has never looked into buying Chicago-based Playboy, and won’t do so in the future.
Earlier in the week, another firm, Golden Gate Capital, said that it will not be involved in any way with a possible purchase of Playboy.
Playboy shares had jumped last week after reports that Playboy was in talks with several parties, including Golden Gate and, separately, Iconix Brand Group Inc., about a potential purchase. A New York Post report also mentioned Oak Hill as one of several potential buyers.
Playboy spokesman Matt Pakula had no comment.
Playboy has been looking for a buyer since Scott Flanders became CEO in June, replacing longtime head Christie Hefner, the daughter of Hugh Hefner.
In the third quarter, Playboy’s ad revenue plunged 44 percent to $9.45 million, according to the Publishers Information Bureau. Circulation declined 9 percent to 2.45 million in the first six months of the year, the Audit Bureau of Circulations reported.
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