Netmarble Chairman Bang Jun-hyuk (Netmarble)
Netmarble Chairman Bang Jun-hyuk will spend 374 billion won ($270 million) to buy most of Tencent affiliate Han River Investment’s stake in the Korean game developer, tightening his control while removing a potential share-sale pressure.
According to Netmarble on Friday, the transaction was made as Han River Investment looked to sell a part of its 18.1 percent stake in Netmarble. Bang agreed to purchase 11.15 million shares, which are priced at 33,538 won each. The transaction is scheduled to close on Sept. 21.
Netmarble said the agreed price reflects a block-trade discount to Netmarble’s average share price over the month preceding negotiations.
The deal will raise Bang’s stake in Netmarble from 24.93 percent to 38.34 percent, while Han River Investment’s holding will fall to 4.69 percent. The gap between the two largest shareholders will consequently widen from 6.82 percentage points to 33.65 percentage points.
Industry watchers say that the Netmarble chief’s decision is aimed at removing a large potential source of selling pressure as the dumping of Tencent-related shares could have rattled Netmarble’s stock price.
According to Netmarble’s regulatory filing, the purpose of the acquisition was described as “strengthening responsible management” while Han River Investment cited the recovery of investment funds as the reason for the sale.
As the transaction is a shareholder-to-shareholder deal, Netmarble itself will not receive proceeds from the sale. Bang is expected to finance the acquisition through a stock-backed loan, with details of the collateral and other terms to be disclosed later.
Netmarble said the change in ownership will not affect Netmarble’s business relationship with Tencent, which dates back to 2014 when Tencent invested 530 billion won in Netmarble’s predecessor CJ Games, and the two companies will continue cooperating in the global gaming business and other sectors.
hwkan@heraldcorp.com