Playboy agreed to repurchase 16.6 million shares from Fortress Investment Group for $1.05 each, a 28 percent discount to market value. The $17.4 million deal covers nearly 15 percent of outstanding shares and is backstopped by major stockholders Rizvi Traverse and Byborg.
Playboy agreed to repurchase 16.6 million shares from Fortress Investment Group for $17.4 million, a buyback covering nearly 15 percent of outstanding stock.
"We have one of the largest and most valuable brands in the world and one that would be nearly impossible to replicate today," Ben Kohn, chief executive officer of Playboy, said. "We believe the intrinsic value of the Company is considerably higher than today's price and therefore this was an extremely compelling capital opportunity."
Playboy paid $2 million at signing and will pay the remaining $15.4 million in three installments through Dec. 31, 2026, at the fixed price of $1.05 per share. The deal is fully backstopped by affiliates of Rizvi Traverse Management and Byborg Enterprises SA, who have agreed to purchase the shares directly from Fortress if Playboy does not. The negotiated structure eliminates the risk of 16.6 million shares being sold on the open market.
Shares rose 6.2 percent to $1.54 on the news, adding about $10 million to Playboy's market value. The buyback follows five consecutive quarters of positive adjusted EBITDA, a licensing deal with Byborg, a China joint venture with United Trademark Group and accelerated paydown of senior debt.
The repurchase signals management's conviction that Playboy's stock is undervalued relative to its brand and earnings trajectory. Investors will watch the company's ability to fund the remaining installments from operating cash flow through year-end.
This article is for informational purposes only and does not constitute investment advice.
