* Playboy Mansion said to be undervalued in takeover
* Shareholders say Hefner buying Playboy too cheaply
By Jonathan Stempel
NEW YORK, Feb 11 So how much is Hugh Hefner's
iconic Playboy Mansion really worth?
The issue has arisen in a lawsuit accusing the 84-year-old
media mogul of trying to take Playboy Enterprises Inc PLA.N,
the publisher known for nude centerfolds, private in a
sweetheart deal at other shareholders' expense.
In an amended complaint filed Feb. 4 in Delaware Chancery
Court, shareholders complained that an October 2010 appraisal
valued the 29-room Los Angeles mansion at $54 million, 45 times
higher than the $1.2 million shown on Playboy's books.
This is unfair, they say, because it leaves the entire
They say Playboy is shortchanging them just as the company
prepares to benefit from recent cost cuts and a growing focus
on licensing its iconic "Bunny Ears" logo, to offset a trend
whereby more people use the Internet to view naked women.
By "overreaching," the complaint said, "Hefner is
preventing Playboy Enterprises shareholders from receiving the
highest price possible for their shares."
The lawsuit seeks class-action status, and said Playboy
should have tried to find better offers from third parties.
Hefner controls about 70 percent of Playboy's Class A stock
and 69.5 percent of its voting power, court and regulatory
A Playboy spokeswoman did not immediately return a call
Hefner proposed on Jan. 10 to take Playboy private at $6.15
per share, valuing the Chicago-based company at $207 million.
The offer was 18 percent above where the shares had closed
the prior Friday, and 12 percent above a separate offer that
Hefner had made the previous July.
Described on its website as "Hef's Garden of Eden" and "a
miniaturized Versailles," the turreted Playboy Mansion sits on
a hilltop and features a pool, a gymnasium, tennis courts, a
bath house and a grotto, among other accouterments.
Including land and improvements, the six-acre complex is
valued at $5.09 million, according to the property roll of the
Los Angeles County assessor's office.
Hefner paid $1.05 million for the property in 1971. Playboy
Enterprises now owns the Gothic-and-Tudor style mansion and
leases it to to him.
The mansion plays host to a variety of parties and other
social events, and is a setting for film and television
productions and magazine photography.
Playboy shares closed Friday up 1 cent at $6.14.
The case is In re: Playboy Enterprises Inc Shareholders
Litigation, Delaware Chancery Court, No. 5632.
(Reporting by Jonathan Stempel in New York; Editing by Bernard