Playboy Inc. said Monday that it has agreed to repurchase 16.6 million shares from Fortress Investment Group at $1.05 per share, a move that sparked an 11.5% rise in the company’s shares during premarket trading.
The repurchase equals nearly 15% of Playboy’s outstanding stock and carries an aggregate consideration of about $17.4 million. Under the terms of the arrangement, the transaction extinguishes Fortress’s entire equity position in the company at the fixed price specified in the agreement.
Playboy made an initial cash payment of $2.0 million at execution. The remaining $15.4 million is due in three scheduled installments, with the final installment payable by Dec. 31, 2026. The company said it may accelerate those purchases at its discretion. As part of the deal, Fortress has agreed not to sell, transfer, or otherwise dispose of the shares during the term of the agreement.
To limit the risk that the shares could be sold into the open market, the transaction is backstopped by affiliates of Rizvi Traverse Management and Byborg Enterprises. Those parties committed to step in and purchase the shares pro rata directly from Fortress if Playboy does not complete the purchases itself.
CEO Ben Kohn commented that the company has recorded five consecutive quarters of positive adjusted EBITDA and that management believes Playboy’s intrinsic value exceeds the prevailing market price. The company also stated the repurchase is immediately accretive to earnings per share.
Playboy funded the initial $2.0 million payment from cash on its balance sheet and said the remaining scheduled payments will be met with a combination of cash and other financing mechanisms. Management described the negotiated timetable for payments as preserving balance sheet flexibility while removing the risk that 16.6 million shares could hit the open market.
The buyback follows a series of recent operational actions disclosed by the company, including a licensing arrangement with Byborg, a China joint venture with United Trademark Group, and an accelerated paydown of senior debt.
Context and immediate effects
The announced repurchase reduces the number of shares in public hands and removes Fortress as a shareholder at a defined price, a structure Playboy framed as supporting EPS performance and limiting potential market disruption from a large block sale. The backstop commitments offer a secondary safeguard to ensure the shares will be acquired even if Playboy elects not to complete all scheduled purchases.
What the company said about financing
Playboy used cash on hand for the upfront payment and plans to combine cash with other financing options for the remainder of the consideration. Management characterized the staggered payment schedule as a means to retain balance sheet flexibility through the period leading up to the final installment on Dec. 31, 2026.
Operational developments referenced by the company
- Licensing deal with Byborg.
- China joint venture with United Trademark Group.
- Steps to accelerate senior debt reduction.