A senior M&A official from Tencent, the world’s seventh largest company in terms of market cap, is coming to Seoul this month at a time gaming and capital companies are frenziedly working out bids over South Korea’s leading gaming publisher Nexon, up for sale at its best in top-line figures.

According to multiple industry sources on Tuesday, Ma Xiaoyi, senior vice president of Tencent Holdings, will be arriving with a team of other executives, timed with a board of directors meeting of Krafton later this month in Korea. Ma, dubbed as the No. 2 behind Tencent founder and chief Ma Huateng, has been a non-standing executive director of Krafton (formerly Bluehole), a Korean game company behind the hit survival shooter game “PlayerUnknown’s Battlegrounds” since November last year after the company invested for an 11 percent stake.

His trip draws attention in the gaming and M&A industry as the most valuable Chinese company with a voracious appetite for gaming entities has expressed interest in the majority ownership over NXC Corp., holding company of Korea’s top game company Nexon.

Tencent joined other big names such as U.S. private equity funds KKR, TPG and Carlyle Group, as well as Korea’s leading game publisher Netmarble Corp. and dominant online messenger operator Kakao Corp., in the race to win the majority 98.64 percent stake in NXC, which is estimated at more than $6 billion.

Given fears about Chinese command over Korea’s gaming power, Tencent may likely opt to form a consortium with a Korean name. Tencent is major shareholders of both Netmarble and Kakao.

Last week local media reported that Netmarble has invited Tencent to join its team with Korean private equity fund MBK Partners. The rivaling team led by Kakao and a global PEF could also be appealing.

NXC owns 47.98 percent in Nexon, a publicly traded company in Japan. The Japanese entity controls Nexon Korea, which has stakes in over 10 companies including Europe-based cryptocurrency exchange Bitstamp and children furniture and stroller maker Stokke. Considering all these stake holdings, market experts predict the sale price for NXC would go up to as high as 13 trillion won ($11.6 billion), if Japan’s mandatory tender offer rule is applied.

Helping its value, Nexon on Tuesday reported its operating profit gained 9 percent on year to 98.4 billion yen ($889.1 million) for full 2018 while its revenue grew 8 percent to a record high of 253.7 billion yen. Net profit nearly doubled to 107.7 billion yen over the cited period. It performed especially well abroad - China and the U.S. - with its overseas business growing 17 percent on year to 179.9 billion yen to account for about 71 percent of its total annual revenue.

For the fourth quarter, its operating profit plunged 67 percent on year to 3.9 billion yen and sales sank 13 percent on year to 46.1 billion yen. It nevertheless swung from a loss to a net profit of 648 million yen.

On Wednesday, shares of Nexon gained 2.4 percent to close at 1,710 yen in Tokyo stock exchange. In Seoul, shares of NAT Games Co., an NXC subsidiary ended 1.2 percent higher at 12,600 won, and those of Nexon GT Co. 0.77 percent lower at 12,850 won.

By Cho Si-young and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]