Sometimes drama does occur in the financial markets. High Heffner participated in taking Playboy private, and now we have Larry Flynt making an acquisition of the public company called New Frontier Media, Inc. (NASDAQ: NOOF). New Frontier describes itself as “a leading provider of transactional television services and distributor of general motion picture entertainment.” The reality is that New Frontier is a pay-per view movie distributor through hotels. Many investors know of New Frontier as the in-hotel adult programming channels.
As far as Larry Flint’s involvement, the deal is said to be by LFP Broadcasting, LLC as an affiliate of L.F.P., Inc. The press release confirms that this Larry Flynt’s company.
As far as the terms, New Frontier holders will receive $2.02 per common share in cash up front, or approximately $33 million. Shareholders can also have some added upside as part of a contingent cash payment right for each common share. It stated, “New Frontier Media shareholders may also be entitled to receive additional contingent cash payments, not to exceed $0.06 per common share, tied to the extent to which New Frontier Media’s available cash balance at the closing of the tender offer, less unpaid transaction expenses, exceeds $11,514,000.”
New Frontier had been under a review of strategic alternatives after reporting unsolicited expressions of interest. The offer price is roughly a 79% premium to its stock price on March 8, 2012 from when it received a publicly announced unsolicited acquisition proposal.
Shares of New Frontier are up 34% at $1.75 against a 52-week range of $0.84 to $1.75.
JON C. OGG
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