Adult magazine publisher Playboy Enterprises Inc. (NYSE.PLA) is about to go private as founder Hugh Hefner has received the nod from the board to buy the company.

Hefner, 84, who was in the news recently for his engagement to Crystal Harris, 24, a British-American model and singer who was the Playboy's Playmate of the Month in December 2009, has offered to buy the company for $6.15 per share. The offer values Playboy at about $207 million. The offer was accepted following months of intense negotiations. The accepted offer represents 12 percent premium to Hefner's original offer of $5.50 per share in July.

A group of board members had been evaluating Hefner's offer and decided to recommend the deal to stockholders on Sunday night.

CEO Scott Flanders will remain at the company and keep a significant equity investment in Playboy, the company said.

I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world, Hefner said in a statement. A tender offer by Icon Acquisition Holdings L.P., a limited partnership controlled by Hefner, and Rizvi Traverse Management LLC is expected to begin by Jan. 21 and the deal is expected to close by the end of the first quarter.

The announcement ends the bidding war between Hefner and FriendFinder Networks, owner of Penthouse magazine, which had offered $6.25 per share.

Hefner already owns around 70 per cent of Playboy's Class A common stock and 28 percent of its Class B stock. The sweetened offer represents an 18 percent premium over the Class B closing price of $5.20 a share on Jan. 7.

Last July, Hefner said he wants complete control of Playboy as he's concerned about the business direction the company is taking. Hefner, who is Playboy's editor in chief, has also has criticized the magazine's editorial board.

Playboy, founded by Hefner in 1953, expanded around the globe in the 1960s and '70s when Hefner ran the company. In 1971, the company went public and circulation hit 7.2 million for one issue in 1972.

However, Playboy, whose magazine with same name features scantily clad women, pithy lifestyle features and long interviews with celebrities, is now struggling against rivals such as Hustler, Penthouse and others, even as changes brought on by the Internet, which made free pornographic content available online in abundance, eroded its print advertising revenue. In recent years, cash crunch forced Playboy to license its popular bunny logo - a rabbit wearing a tuxedo bow tie - to third parties that sell a wide range of products ranging from apparel and deodorant sprays to accessories, dolls and drinks. However, core Playboy fans have criticized the move, claiming that some of the products that carry the licensed bunny logo have no connection with Playboy.

Though Playboy is making money by being in other businesses, Hefner said initially it was the magazine that carried the brand.

However, sales of Playboy magazine, which peaked at 7.1 million in late 1972, began to dwindle as the market shifted to laddy magazines such as Maxim. By last year, it was down to 2.6 million, and in October, Playboy cut that figure to 1.5 million, where it stands now. Now the company derives only one-third of its revenues from Playboy magazine – whose current circulation now stands at 1.5 million - while the other two-thirds come from the dissemination of adult content in electronic form, such as television, the internet and DVDs. In 2006, the company's revenue stood at $331 million, down from $347 million in 1999. By 2009, the figure had slumped to $240 million.

Naturally, Hefner, who heads Playboy's creative team, was forced to acknowledge that now the brand carries the magazine.

Hefner said he is not interested in either selling or merging the company after gaining 100 percent control of it. The publisher, which has about $115 million in debt, will engage in a brand restructuring program.