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Penthouse owner raises $551m financing

Publisher intends to purchase rival publishing group Playboy Enterprises

FriendFinder Networks, publisher of Penthouse magazine, has generated $551m debt financing as it prepares to launch a bid for rival publishing group Playboy Enterprises, said the company on Thursday in a statement.

According to a US Securities and Exchange Commission regulatory filing, the Florida-based company which owns adult-entertainment websites has postponed plans for an initial public offering of 49 per cent company stock to raise $240m.

Instead it will issue $296m worth senior secured bonds due in 2013 to recapitalise, simplify its capital structure and extend its maturities, said financial services group, Standard & Poor.

Friendfinder had expressed its interest in acquiring Playboy with a bid for $210m in July, 14 per cent premium to the $5.5 per share, $185m deal that the magazine's founder Hugh Hefner had offered to buy back the Class A and Class B shares he didn't own.
A board was formed in August to asses Hefner's bid.

The editor-in-chief of the magazine has said that he is not interested in selling the magazine or bring in outside financial support.