Virgin Denies Playboy
Richard Branson squashes acquisition rumors as mag's stock price inches up.
After rumors of his interest in acquiring Playboy sent its stock on a short flight, Virgin Atlantic CEO Richard Branson said today his company has no interest in buying the magazine.
"Reports that Virgin Group is looking to buy Playboy Enterprises are untrue," a Virgin spokesperson said in an-email to Reuters.
On Wednesday, the Daily Mail reported Branson was â€śtipped as a potential buyer.â€ť The story followed a report in the New York Post that Playboy was quietly floating an asking price of $300 million, or about three times its market cap, for the company.
The Virgin/Playboy rumor sent the publisherâ€™s stock from $2.80 cents per share at the market open Wednesday to $3.38 a shareâ€”or about 20 percentâ€”by midday Wednesday. (The stock closed at $3.20 per share Thursday.)
During a February conference call, interim Playboy CEO Jerome Kern said the company would be open to discussions of a possible sale.
Even without a sale, though, it has already been a transformativeâ€”and rockyâ€”year for Playboyâ€™s business.
In January, Christie Hefner, daughter of founder Hugh Hefner and Playboyâ€™s CEO of 20 years, stepped down.
That same month, Playboy said it would close its New York offices and combine its print and online editorial operations. Jimmy Jellinekâ€”former top editor of Maxim who served as senior vice president of Playboyâ€™s digital content divisionâ€”was promoted to editorial director, overseeing the companyâ€™s combined editorial content. Chris Napolitano, who served as editorial director of the print magazine, stepped down.
Earlier this month, while the company reported a $13.7 million quarterly loss, Kern said Playboy is considering "radical changes" of the print business model, including price increases, a frequency reduction and lowering its rate base of 2.6 million. The company also said it would combine Playboy's July and August issues into a double issue.
Last October, Playboy eliminated 80 positions across the company in a cost-cutting effort, and closed its DVD business.