Naver affiliate Line Games seeks $756 million IPO in Korea

Line Games Corp., an affiliate of South Korea’s internet giant Naver Corp., plans to list its shares on the Korean stock market via an initial public offering, likely to occur in 2023.

Line Games recently sent out a request for proposal (RFP) to local brokerage firms to select lead managers for the share sale, investment banking sources said on Wednesday.

If successful, the IPO will mark the first public listing of any company affiliated with Naver on the Korean stock market.

The company plans to choose lead managers by the end of this year through competitive bidding and begin the full-fledged IPO process as soon as the domestic stock market recovers from its current doldrums, the sources said.

Line Corp., a Tokyo-based subsidiary of Z Holdings, which is jointly owned by Softbank Group and Naver, is the largest shareholder of Line Games with a 35.6% stake.

Seoul-based private equity firm Anchor Equity Partners, which invested 125 billion won ($95 million) in Line Games in 2018, is its second-largest shareholder with a 21.4% stake.

Line Corp. established Line Games in 2017 and merged it with game developer Next Floor in 2018.

LOSING MONEY SINCE LAUNCH

Featuring a variety of games in the mobile, PC and console sectors, Line Games has been losing money since its launch.

In August, the company ambitiously unveiled its latest massively multiplayer online role-playing game (MMORPG), Uncharted Waters Origin, to boost its profitability.

Industry watchers expect the enterprise value of Line Games to exceed 1 trillion won ($756 million) if its IPO proves successful.

Its corporate value stood at around 900 billion won when it attracted a combined 100 billion won from Chinese entertainment conglomerate Tencent Holdings Ltd. and US-based Kairos Investment Management Co. in the first half of 2021.

Naver subsidiaries have been absent from the Korean IPO market in recent years.

Naver Financial Corp. has dropped its IPO bid after criticism that Naver units are aggressively selling shares to pocket profits from business growth.

Naver Webtoon Corp. is seeking to list its shares in the US market.

Write to Seok-Cheol Choi at dolsoi@hankyung.com
In-Soo Nam edited this article.