S.Korea seeks to sell 29% in game giant Nexon's holding firm

The South Korean government is planning to sell off a 29.3% stake in Tokyo-listed game giant Nexon Co.’s holding firm NXC Corp. via a public bid in late December, sources familiar with the matter said on Sunday.

The Ministry of Economy and Finance and state-owned Korea Asset Management Corp. (KAMCO) are slated to complete the valuation process of NXC shares late this month, decide the proposed sale price and conduct a tender offer by the end of December, according to sources.

The finance ministry became the second-largest shareholder of NXC with a 29.3% stake in May of this year as the two daughters of the late Kim Jung-ju, the holding firm’s ex-chairman and Nexon founder, handed over the shares instead of cash to pay their inheritance tax. 

As Kim unexpectedly died at the age of 54 in February of the last year, his family came to inherit all his shares in NXC and hold a combined 96.92% stake. 

NXC owns about 48% of Tokyo-listed Nexon, which fully controls its Korean entity Nexon Korea Corp. 

According to NXC’s regulatory filing on Oct. 18, Kim’s bereaved family and their privately owned company hold a combined 70.71% stake. Kim’s wife Yoo Jung-hyun owns 34%, while each of their two daughters holds 17.49%. Wisekids LLC, a Seoul-based toy manufacturer in which each daughter owns 50%, has a 1.72% stake in NXC.

Even if the ministry sells off all of the NXC shares it owns, the deal will not affect the bereaved family’s control over the holding firm as they control more than 70%, market watchers say.

The Korean government could face a bumpy road to the private equity sale due to the deal size, according to market watchers.

Korea’s National Tax Service calculated a 29.3% stake and 20% of control premium in NXC at 4.74 trillion won ($3.6 billion) in May when Kim’s daughters handed over the shares.

The valuation of the shares in December could be slightly different from the calculation in May due to the seven-month gap, market watchers say.

As divestment of NXC shares may take longer than expected, the finance ministry hasn’t included the NXC stocks in its corporate equity sales plan for 2024, the government department said. 

Write to Kyung-Min Kang at kkm1026@hankyung.com

Jihyun Kim edited this article.