The candidates for the acquisition of Nexon, a dinosaur in the game industry, have narrowed down to three players: Kakao, Netmarble and MBK Partners.
The three companies are expected to engage in a heated behind-the-scenes battle with China's Tencent, who holds the casting boat for the upcoming negotiations.
According to investment banking industry on June 16, Nexon is continuing to negotiate with Kakao, Netmarble, and MBK Partners.
However, there has been no contact with other bidders, including KKR and Bain Capital.
"Kakao, Netmarble and MBK Partners are most actively engaged in negotiations as of now. The negotiations will continue further for the next one to two months," said an industry source.
China's largest game company Tencent, Nexon's biggest customer, is reportedly keeping close tabs on the progress of the sale during the ongoing main bidding process. Another reason why the industry's eyes are on Tencent's move is that they are the main shareholders of Kakao and Netmarble.
In the industry, Kakao is taking a strategy to proceed with negotiations fairly carefully, so it does not easily try to join hands with others. However, Acquisition financing is expected to be arranged in cooperation with Korea Investment & Securities and KDB Industrial Bank of Korea.
Tencent of China is also likely to join the consortium, which will provide 800 million to 1.6 billion dollars in funding if Kakao becomes the final buyer. The takeover bid is expected to require at least $6 billion, which makes it difficult for the fund to acquire the deal alone.
In the case of Netmarble, another candidate, the strong point is that it is a game company like Nexon. Netmarble, however, had relatively little time to prepare for the main bid because it was the lateest among the three companies to be nominated for the bid.
MBK Partners has Merit in that it has abundant financial power well beyond Kakao and Netmarble. "MBK Partners will also be preparing to purchase Nexon in a way that will ensure management control," said an industry source.