Nexon's parent delays bidding for its stake

Seoul

THE parent of top South Korean gaming firm Nexon Co Ltd has delayed the bidding process scheduled this week for its controlling stake in the company, two sources familiar with the matter said on Tuesday, causing its shares to dive.

Any postponement will raise concerns for the future of a deal that would rank as one of South Korea's biggest, and at potentially US$16 billion, the biggest gaming deal worldwide.

"How the deal is going forward is uncertain, that is hitting shares of Nexon companies that are responding a lot to news related to the sale," said Lee Chang-young, an analyst at Yuanta Securities.

Nexon shares listed in Japan were down 5 per cent as at 0437 GMT, while the broader Nikkei share average was 0.8 per cent softer. Nexon affiliates Nexon GT and Nat Games both tumbled 19 per cent after Reuters reported the postponement.

One of the sources said the bidding, scheduled for Wednesday, had been postponed by one week. The sources did not elaborate on the reasons for the delay and declined to be identified because the matter was confidential. A spokeswoman for Nexon's holding firm, NXC Corp, declined to comment.

Billionaire Jungju Kim is selling a 98.64 per cent stake held by himself and his wife in NXC, the holding company that owns 48 per cent of Nexon, whose Dungeon Fighter game is a smash hit in South Korea and China.

Chinese gaming giant Tencent, South Korean tech firms Netmarble and Kakao, as well as private equity firms Bain Capital, MBK Partners and KKR submitted initial bids in February, sources said previously.

Tencent is seen as the key to any deal since it owns the exclusive China licence for Dungeon Fighter.

Neople, the Nexon unit that developed the game, generated 1.24 trillion won (S$1.4 billion) in revenue from Tencent in 2018, up 17 per cent year on year, under a publishing deal which is effective till 2025, according to Neople's public filings. REUTERS