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Longkloof Turns the Tables and Sues New Frontier Media

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ST. HELIER, Jersey, Channel Islands — Longkloof Limited today announced that it has counterclaimed against New Frontier Media, Inc. NOOF +0.64% and its Board of Directors claiming that the Board has breached its fiduciary duties in denying Longkloof’s nomination of a slate of four directors and in stonewalling Longkloof’s previously announced all-cash, fully financed offer to acquire the Company.

The counterclaims allege, among other things, that the Board is seeking to entrench itself and to continue to pay themselves extravagant directors’ fees. To preserve their annuity, the Board is resisting any offer to acquire the Company even on generous terms. The effort to deny shareholders the opportunity to vote for a competing slate – that would more open-mindedly consider all acquisition proposals – is simply a continuation of the Board’s efforts to entrench themselves in office.

On May 23, 2012, Longkloof sent the New Frontier Board a letter offering to acquire all common shares of the company not owned by it for $1.75 per share. At that time, the offer represented a premium of over 60% to the stock’s average closing price from the start of this year until February 15, 2012, the date on which Longkloof first contacted the Board expressing its interest in an acquisition. Shareholders should appreciate that since Longkloof’s public involvement on March 9th through the day New Frontier Media filed its lawsuit on May 31st – New Frontier shares had appreciated over 50%. Since the Board’s lawsuit to deny Longkloof’s nominees the right to stand for election – New Frontier’s shares have tumbled almost 10%.

Rather than give shareholders the opportunity to vote on any of the value enhancing alternatives that Longkloof has put before them, the Board frivolously sued Longkloof. They apparently decided that an expensive ‘scorched earth’ litigation strategy, using shareholder money and reducing the value of the Company, to protect their jobs was their best defense to our full and fair offer and our slate of four highly qualified nominees for election to the Board at the 2012 annual meeting of shareholders.

Given the history of this Board’s behavior and the outrageous fees they pay themselves, we are obviously very disappointed, but not surprised by their baseless lawsuit.

Additional Information Concerning Participants

Longkloof, together with the other Participants, intends to make a preliminary filing with the SEC of a proxy statement and accompanying proxy card to be used to solicit votes for the election of its slate of director nominees at the 2012 Annual Meeting of Stockholders of New Frontier Media, Inc.


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