P.M. BRIEFING : Playboy Plans Recapitalization

CHICAGO — Playboy Enterprises Inc. said today it has adopted a recapitalization plan designed to increase the company’s financial flexibility.

Under the plan, Playboy would establish two classes of common stock, including a new class of non-voting stock, and nearly double the total number of outstanding shares.

The recapitalization was adopted by the company’s board of directors and is subject to stockholder approval.

“We believe that the proposed recapitalization will provide Playboy with increased flexibility to use equity in future acquisitions, financings and employee benefit plans without diluting the voting power of existing stockholders,” said Chairman Christie Hefner.

Playboy has been unable to issue equity for financing, acquisitions or employee benefits without diluting the voting control of the company’s founder and majority stockholder, Hugh Hefner.

Hefner, chairman emeritus and editor-in-chief of Playboy magazine, said he supports the plan and will vote to approve it. Hefner owns 70.6% of Playboy’s outstanding shares.

The two new stock classes--Class A and Class B--will have substantially identical rights, including dividend rights. Class A will have one vote per share and the other will be non-voting.