The founder of South Korea’s largest gaming company Nexon Co. has put his entire stake in NXC Corp., the group’s holding company, up for sale.
Gaming and investment banking (IB) industry sources said on Jan. 3 that NXC CEO Kim Jung-ju has offered to sell off NXC shares owned by him and his affiliated persons. Kim currently owns a 67.49 percent stake in the holding company, his wife Yoo Jung-hyun, who is an auditor at NXC, 29.43 percent, and Kim’s private company Wise Kids Co.1.72 percent.
Kim has reportedly hired Deutsche Securities Inc. and Morgan Stanley Group to supervise the stake sale. The two companies will invite preliminary bidders as early as next month.
The market capitalization of Nexon Co., which was listed on the Tokyo Stock Exchange in 2011, currently comes to 13 trillion won (US$11.53 billion) and the value of NXC’s 47.98 percent stake in Nexon Korea, the key affiliate of Nexon Group, stands at 6 trillion won (US$5.32 billion). Market analysts estimate the acquisition price at more than 10 trillion won (US$8.87 billion), when considering the value of the companies owned by NXC, including Stokke, a luxury brand of stroller.
As this would be the largest-ever merger and acquisition (M&A) deal in the nation, all eyes are on who will be the new owner of Nexon. Since there are no companies big enough to acquire Nexon in the Korean gaming industry, Chinese companies which have been making a massive investment in the gaming related industry, such as Tencent Holdings Ltd. and NetEase Inc., are considered strong buyer candidates.
The Nexon founder’s move is causing concerns that it would hand over not only the group’s intellectual property rights and workforce but also its leadership in the gaming industry to China.