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Playboy’s Quarterly Bust Bigger Than Expected

Bunny reports $27.4 million loss; Hefner’s offer to take magazine private still on table

Playboy Enterprises reported a $27.4 million net loss for the third quarter on Tuesday — a bigger quarterly bust than analysts had been expecting for Hugh Hefner’s pin-up empire.

The net loss was equal to 81 cents per share, far worse than the $1.1 million, 3-cents-per-share loss it recorded during the third quarter of 2009.

Revenue slipped 7 percent during the quarter, too.

Playboy attributed the rough earnings report to accounting charges and one-time write-offs, but the deep losses could create more havoc — or at least headaches — for Hefner, who wants to take the company private.

In July, Hefner offered to buy all of the company’s outstanding shares he doesn’t already own for $5.50 apiece. (Hef already owns 69.5 percent of the company's Class A common stock and 27.7 percent of its Class B shares.)

The proposal sparked Friendfinder Networks chief Marc Bell — owner of Playboy rival Penthouse — to make a counteroffer to Playboy shareholders. Bell’s offer values the company at $210 million, or about $25 million more than Hefner’s does.

A special committee — formed by Playboy's board in August — is still mulling both offers, though Hefner has said he would not sell to Bell.

"Penthouse is just looking for publicity," Hefner scoffed in July. "They're not in the picture."

He added: "Playboy isn't in play. I'm buying, not selling."