Bidding process of Korean gaming giant delayed twice in May
As Nexon founder Kim Jung-ju put up for sale a controlling stake in Korea’s leading gaming company, the bidding process was supposed to take place on May 15.
But the process was delayed to May 24 to make Nexon’s share price plunge. And Nexon pushed back the tender schedule once again last week to May 31, according to the Korea Economic Daily.
This prompted observers to question whether the mega-sized acquisition deal, which is expected to be up to $15 billion, will go through as planned.
Kim is trying to sell a 98.64-percent stake in NXC, the holding company that has 48 percent of Nexon that published such globally successful games as Dungeon & Fighter, MapleStory, and FIFA Online.
Several players took part in the preliminary bids in February including China’s Tencent and two Korean info-tech companies of Netmarble and Kakao. Such private-equity funds as MBK Partners, KKR, and Bain Capital also submitted their bids.
Back then, the sale’s lead managers of Deutsche Bank and Morgan Stanley expected that the M&A would be the biggest gaming deal in history at higher than $10 billion.
But analysts now come up with concerns for the future of the much-touted deal.
A few reasons are on the lips of watchers for the postponement. Some say that bidders are asking for more time for due diligence. Others say that Nermarble causes the delay.
They note that Netmarble initially thought of joining hands with Korea’s homegrown private equity fund MBK Partners, but opted to make a separate bid for some reason.
As Netmarble’s annual turnover is around $2 billion, the Seoul-based gaming firm would need a financial partner to provide the necessary funds to purchase Nexon.
Tencent has been regarded as the key player in the bidding as the Chinese gaming giant holds the exclusive China license for Dungeon & Fighter.
It also has the financial leeway to go alone for Nexon. But if the report of the Korea Economic Daily is correct, it remains to be seen whether the sales process would continue.