Netmarble-Kakao-vie-to-buy-Nexon
Nexon head office/Courtesy of Nexon

5 outfits strive to acquire Korean gaming firm

Two Korean info-tech companies and three private equity funds took part in the competition to purchase a controlling stake in the country’s leading gaming company Nexon.

Korean game publisher Netmarble and IT firm Kakao submitted their bids to purchase Nexon along with such private-equity funds as MBK Partners, KKR, and Bain Capital, according to Korean media outlets.

Earlier this year, Nexon founder Kim Jung-ju put up for sale a 98.64-percent stake in NXC, the holding firm that has 48 percent of Nexon that came up with such big hits as Dungeon & Fighter, MapleStory, and FIFA Online.

The bidding process was scheduled to take place in April but the sale’s lead managers of Deutsche Bank and Morgan Stanley delayed it twice to May 15 and May 24.

The process did start on May 24, but the managers postponed its deadline to May 31 to raise concerns for the future of the high-profile deal whose value is expected to be higher than $10 billion.

It remains to be seen who will become the preferred bidder and observers point out that Netmarble and Kakao are strong contenders.

But some question whether the two companies have the financial leeway to purchase Nexon without joining hands with financial investors.

For example, Netmarble’s annual turnover is just about $2 billion. Hence, the Seoul-based outfit initially tried to mint a partnership with the country’s homegrown private equity fund MBK Partners.

But the collaboration talks fell apart for some reason, and they reportedly made separate bids.

In the case of Kakao, its cash and cash equivalents amount to around $2 billion. 

Against this backdrop, Chinese gaming giant Tencent gains attraction of experts.

Watchers point out that Tencent, which holds the exclusive license for Dungeon & Fighter in China, might play a significant role in the M&A.

When contacted, Netmarble and Kakao officials refuse to make comments.

 

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