Nexon founder formally suspends search for buyer

2019.07.09 11:29:42 | 2019.07.09 15:40:42

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The founder of Nexon Co. informed potential bidders he was cancelling his offer to sell his ownership stake in the holding entity of Korea’s top game publisher, signaling a halt to the first-generation game entrepreneur’s plan to retire from the gaming industry.

Kim Jung-ju, founder and chief executive of Nexon, sent out an individual email through lead sales advisor Morgan Stanley to shortlisted bidders that he was officially suspending the sale, according to sources from the gaming and investment bank industry Monday.

Kim is also said to have personally contacted the heads of Netmarble, Kakao, MBK Partners and other companies who had taken part in the tender.

“(Kim) did not detail the exact reason, but simply said that the company decided not to select a preferred bidder due to market conditions,” a source from the gaming industry said.

Rumors that the Nexon founder could call off the deal had circulated since late last month after the company had failed to attract big foreign names to the offering despite several deferments in the deadline.

Kim Jung-ju, founder and chief executive of Nexon.이미지 확대

Kim Jung-ju, founder and chief executive of Nexon.

Disagreement over the price appears to have been the biggest stumbling block, according to the sources.

The preliminary tender process had started in February but failed to gain much traction due to the hefty price tag. Kim is said to have called for 15 trillion won ($12.7 billion) for the 98.6 percent stake in NXC Corp., Nexon’s parent company. The market had estimated the value to be around 10 trillion won.

Despite the early hype, none of the big entertainment names like Disney, Amazon and Tencent entered.

Industry experts speculate Kim may take a breather to shore up Nexon’s market value before putting it up for sale again, as he had previously said he was “considering various plans to make Nexon a more globally competitive company.”

To this end, Nexon is expected to spruce up its offerings, including Dungeon Fighter Online, a massively popular PC game in China, and its longtime blockbusters MapleStory and Crazyracing Kartrider. Insiders say the company may also aggressively pursue M&As at home and abroad to accelerate growth.

Shares of Nexon affiliates, NetGames and Nexon GT, have both plummeted more than 50 percent from their peak in February and May, respectively. Shares of NetGames closed Tuesday down 0.72 percent at 6,890 won and Nexon GT 1.83 percent lower at 8,060 won.

By Lee Sun-hee and Kim Hyo-jin

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