Nexon founder scraps what would be biggest gaming deal - source (updated)

Netmarble

08/07/2019 10:49

* Kakao, MBK bidding process short of Nexon's expectations
-paper
    * Transaction could have been worth as much as $16 bln

 (Adds background)
    SEOUL, July 8 (Reuters) - Nexon Co  3659.T  founder, Jungju
Kim, is no longer planning to sell a majority stake in the
parent of the firm, a person with direct knowledge of the matter
said, scrapping what could have been the top gaming deal
worldwide at potentially $16 billion.
    The move comes after the sales plan emerged in January and
has since been dogged by funding challenges and the intricacies
of the South Korean firm's relationship with Chinese partner
Tencent Holdings  0700.HK .  urn:newsml:reuters.com:*:nL3N21F199
    "I am not picking a preferred bidder in light of market
conditions and others," the billionaire founder said in an email
to bidders including Netmarble  251270.KS , Kakao  035720.KS 
and MBK Partners, South Korean newspaper Joongang Ilbo reported.
    The paper reported that the bidding prices of Kakao and MBK
fell short of Nexon's expectations, while Netmarble's funding
capability was in doubt. Big tech giants like Tencent did not
participate in the bidding, it added.
    Nexon, Netmarble, MBK declined to comment. Kakao did not
immediately comment on the news when contacted by Reuters. 
    Kim had been reportedly looking to sell a 98.64 percent
stake held by himself and his wife in NXC, the holding company
that owns 48 percent of Nexon, whose Dungeon Fighter game is a
smash hit in South Korea and China.
    Taking into account the market value of Nexon and a takeover
premium of 15%, which has more or less been the standard for
other gaming deals, according to Dealogic data, the transaction
was pegged at being worth about $16 billion earlier this year -
potentially ranking as one of South Korea's biggest deals.
    However, formal bidding for the stake was delayed from
mid-May, sources had told Reuters.  urn:newsml:reuters.com:*:nL4N22Q0PL

 (Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Himani
Sarkar)
 ((hyunjoo.jin@thomsonreuters.com; 82-2-3704-5685; Reuters
Messaging: hyunjoo.jin.thomsonreuters.com@reuters.net))