Shares of Boulder-based New Frontier Media Inc. rose 7 percent Wednesday on reports that an investor is seeking to buy out the adult-entertainment company.
Warren Lichtenstein of New York- based Steel Partners II LP told New Frontier’s board of directors he had an interest in leading a “management buyout” of the New Frontier shares, according to a document filed with the U.S. Securities and Exchange Commission late Tuesday.
“Mr. Lichtenstein expressed a willingness to pay a premium over the market price, but declined to state the price per share or the amount or range of premium over market price that he is prepared to offer,” said the filing.
Shares of New Frontier closed up 59 cents at $8.48 Wednesday. New Frontier operates pay-per-view and on-demand channels under the TEN brand name. Its chief competitor is Playboy Enterprises Inc.
Calls to New Frontier Media were not returned Wednesday.
Steel Partners owns about 3.5 million, or about 14.6 percent, of New Frontier’s outstanding shares. The firm began buying shares of the company last November.
Michael Kelman of Susquehanna Financial Group said Lichtenstein’s buyout offer was a signal that New Frontier shares have been undervalued.
The analyst also said the proposed buyout is an endorsement of New Frontier’s management, which otherwise could have been jettisoned in a privatization.
Lichtenstein has a record of successful activism. This year, he was part of a group that led a privatization of restaurant operator Fox & Hound.
Last week, Lichtenstein and investor Carl Icahn ended an alliance that sought a $10 billion hostile takeover of KT&G Corp., South Korea’s largest tobacco company.
The Associated Press contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
