UPDATE, 1:50 PM: New Frontier says that its independent directors have formed a Special Committee to examine Longkloof’s takeover offer. The directors will conduct a “timely” review. But the company adds that “no definitive time frame has been determined” — and the review “will be conducted in a manner that will minimize any disruptions to New Frontier Media’s business operations.” Law firms Blank Rome and Holland & Hart will provide legal advice, and the company is looking for a financial advisor.

PREVIOUS, 12:54 PM: New Frontier stock is up about 15% to $1.30 a share this afternoon after investment company Longkloof Limited offered to pay about $18.8M, or $1.35 a share, for the company. The proposal would cover the 85% of New Frontier shares not already owned by Longkloof, which is based in the Channel Islands. Although the amount is modest in entertainment industry terms, a deal could be important for pay TV providers: New Frontier is a power in porn, the corner of the business that execs don’t like to talk about. The company produces VOD features, it also offers the Penthouse TV premium channel and pay-per-view services packaged as The Erotic Networks (or TEN) that include Xtsy, Juicy, and VaVoom. Longkloof says that it wants to move in because “we believe the current Board is more focused on maintaining its excessive director fees and engaging in related party transactions, rather than running the Company in the best interest of the stockholders.” It notes that New Frontier shares have plummeted from more than $9.00 about five years ago to yesterday’s closing price of $1.13. Longkloof says that it approached directors with an offer on February 15, and is making the bid public due to the company’s “continued unwillingness to engage in any constructive dialogue with us.” The investment firm adds that “we would not be surprised if this Board found a way to further enrich itself at stockholder expense, given that our offer represents a clear threat to those exorbitant fees.”