LUXEMBOURG — Manwin said Tuesday evening it won't get into a bidding war for New Frontier Media, which yesterday made an agreement with LFP Broadcasting to purchase the company for $33 million.
New Frontier Media in March received a $24.3 million cash offer from Manwin, the adult entertainment conglomerate that operates Playboy TV and numerous other adult properties.
But one day after LFP said it would pick up New Frontier Media in an all-cash deal, Manwin officials said the adult entertainment pay-per-view and video-on-demand company wouldn't be a good fit and has decided to pass on any challenge to acquire the Boulder, Colo.-based company.
"We have looked closely at this for some time and feel that New Frontier Media is a better fit for LFP than it is for Manwin," Manwin spokeswoman Kate Miller told XBIZ. "Thus, we do not want a fight and will not start a bidding war."
LFP's announced acquisition, expected to close during the fourth quarter of the year, must be approved by at least 50 percent of New Frontier Media stockholders, who will be paid $2.02 per common share in cash up front, plus a contingent cash payment right of up to six cents for each common share.
The acquisition price represents approximately a 79 percent premium to New Frontier Media’s closing stock price on March 8, one day before the transactional TV service received an unsolicited acquisition proposal from Channel Islands-based Longkloof, an investment group that owns 15.9 percent of New Frontier Media, and the bid by Manwin.
Manwin's announcement Tuesday clears at least one hurdle placed in front of the LFP/New Frontier Media deal before stockholders take a vote before the end of the month.
As in many mergers and acquisitions of public companies (New Frontier Media is public, while LFP is not), New Frontier Media is subject to shareholder scrutiny for the best offer, particularly from rainmaking law firms.
On Tuesday, The Briscoe Law Firm and Powers Taylor, both of Dallas, asked shareholders to think twice about the LFP/New Frontier Media deal. The law firms have asked for a probe of the pending deal and are spinning for a suit.
"Our investigation relates to the fairness of the proposed price for New Frontier shareholders and whether the board of directors is adequately shopping the company in order to obtain the best possible price for the shareholders," the law firms said in a statement.
"Notably, according to at least one analyst with Yahoo Finance, the true inherent value of NOOF stock could be as high as $4 a share. The proposed lawsuit will seek to obtain the highest possible price for each share of New Frontier stock owned."
New Frontier Media shares climbed to $2.01 in regular trading on the Nasdaq Tuesday, an increase of about 54 percent.
New Frontier Media sells adult video-on-demand and pay-per-view content through satellite, cable and hotel networks. Offerings include Penthouse TV premium channel and The Erotic Networks, which include Xtsy, Juicy and VaVoom.
LFP Broadcasting LLC offers adult entertainment through Hustler TV, which is available through cable, satellite, and hotel TV providers as a video-on-demand or pay-per-view television network. LFP's Hustler TV, available in more than 55 countries, has exclusive broadcasting rights from a large number of top studios.