Speculative Adult Industry Play, NOOF

New Frontier Media


New Frontier Media (NOOF), the producer and distributor of erotic movies, is involved in a takeover battle. The company, which trades at $1.31, has a tangible book value near $2 and has .76c in cash.


Here is the timeline of what happened:  

  • Longkloof Ltd., an offshore Channel Islands investment company, offered $1.35, on March 9th. It already owned 15.9% of NOOF at that point.
  • Manwin, an adult entertainment IT company headquartered in Luxembourg, quickly beat that offer at $1.50
  • Longkloof came back at $1.75 and unsuccessfully tried to put 4 members on NOOF’s board.
  • NOOF fired their CEO claiming that he was siding with the Longkloof takeover.
  • David Nichols, a member of a special committee that NOOF has made up to review the takeover, resigned saying that the committee was not doing what was best for the shareholders.
  • NOOF claimed that David Nichols was siding with Longkloof.
It is interesting that NOOF trades at such a discount to the takeover offer and is protected on the downside by cash and tangible book value. It is also almost breaking even. It might be worth a shot for speculative investors.
Disclosure: I do not own shares of NOOF.

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