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    A035720   KR7035720002

KAKAO CORP.

(A035720)
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SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

South Korea's Netmarble to form consortium for Nexon holding company bid

01/31/2019 | 04:23am EDT
The logo of Netmarble Games is seen at its headquarters in Seoul

SEOUL (Reuters) - South Korean gaming firm Netmarble said it will form a consortium to bid for a controlling stake in Nexon's holding company, the latest to show interest in a deal that could be worth about $9 billion after Kakao.

Both Netmarble Corp and Kakao Corp are backed by Tencent Holdings Ltd and, according to sources, the Chinese tech giant too is considering a bid.

Kim Jung-ju, founder of Nexon, the country's biggest gaming company, plans to sell a 98.64 percent stake in NXC Corp, held by himself and related parties including his wife, the Korea Economic Daily newspaper has reported.

Selling the stake to overseas companies would weaken the competitiveness of the industry in the country, said Netmarble, which controls over a quarter of South Korea's mobile gaming market. Tencent has a 17.66 percent stake in Netmarble.

"We believe the tangible and intangible values of Nexon are important assets to Korea," Netmarble said in a statement, adding its consortium will mainly include domestic firms.

Netmarble also said it had been considering buying Nexon for two months and decided to participate in the bid a month ago.

Nexon shares ended up 0.7 percent on Thursday, after earlier rising more than 3 percent after Netmarble's announcement, in a flat wider market.

South Korea's top chat app operator Kakao, in which Tencent holds a 6.7 percent stake, said last week it was reviewing a bid for Nexon's holding firm.

Spokespersons at Kakao and Netmarble declined to comment on whether the pair would join forces for a bid.

A 98.64 percent stake in NXC would be worth between 8 trillion and 10 trillion won ($7.1 billion and $8.9 billion), according to South Korean local media reports.

Founded in 1994, Nexon has developed more than 80 live games in over 190 countries, including IP-franchise hits such as MapleStory, Dungeon & Fighter, Sudden Attack and KartRider.

Tencent owns the exclusive license to operate Dungeon & Fighter in China. The world's largest gaming company by revenue was hit hard by a freeze on approvals for new titles in China last year, which wiped billions of dollars off its market value.

China has resumed handing out approvals since December and some Tencent titles have since been green lit, although the firm is still waiting for a ruling on its blockbuster PlayerUnknown's Battlegrounds.

(Reporting by Hyunjoo Jin; Editing by Himani Sarkar)

By Hyunjoo Jin


ę Reuters 2019
Stocks mentioned in the article
ChangeLast1st jan.
ANHUI JIANGHUAI AUTOMOBILE GROUP CORP.,LTD. 2.47% 14.1 End-of-day quote.15.29%
KAKAO CORP. -3.77% 115000 End-of-day quote.47.63%
LETS HOLDINGS GROUP CO., LTD. 0.31% 6.52 End-of-day quote.-16.20%
LOOK HOLDINGS INCORPORATED -1.01% 1374 End-of-day quote.43.57%
NETMARBLE CORPORATION -0.82% 121000 End-of-day quote.-7.98%
NEXON CO., LTD. -1.14% 1728 End-of-day quote.-45.66%
TENCENT HOLDINGS LIMITED 2.93% 463.2 End-of-day quote.-17.87%
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Analyst Recommendations on KAKAO CORP.
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Financials
Sales 2021 5 927 B 5,04 B 5,04 B
Net income 2021 937 B 0,80 B 0,80 B
Net cash 2021 3 774 B 3,21 B 3,21 B
P/E ratio 2021 55,8x
Yield 2021 0,03%
Capitalization 49 757 B 42 407 M 42 344 M
EV / Sales 2021 7,76x
EV / Sales 2022 5,94x
Nbr of Employees -
Free-Float 64,8%
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Number of Analysts 29
Last Close Price 115 000,00 KRW
Average target price 166 724,14 KRW
Spread / Average Target 45,0%
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Managers and Directors
Min-Soo Yeo Co-Chief Executive Officer & Director
Su-Yong Jo Co-Chief Executive Officer & Director
Beom-Soo Kim Chairman
Tae-Sung Jung Head-Compliance Support
Kyu-Jin Cho Independent Director
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