Netmarble Chairman Bang Jun-hyuk to Buy 374 Billion Won Stake From Tencent Affiliate, Tightening Control
Key Takeaways
- •Bang Jun-hyuk will purchase 11.15 million Netmarble shares from Han River Investment for 374 billion won ($270 million) at 33,538 won per share, with the deal set to close on Sept. 21.
- •The acquisition raises Bang's stake in Netmarble from 24.93 percent to 38.34 percent, while Han River Investment's holding falls to 4.69 percent.
- •The agreed price reflects a block-trade discount to Netmarble's average share price over the month preceding negotiations.
- •Because the deal is between shareholders, Netmarble receives no proceeds, and Bang is expected to finance the purchase through a stock-backed loan whose collateral terms have yet to be disclosed.
- •Netmarble stated that the ownership change will not affect its business relationship with Tencent, which began with a 530 billion won investment in CJ Games in 2014.
Netmarble Chairman Bang Jun-hyuk will spend 374 billion won ($270 million) to acquire most of the stake held in the South Korean game developer by Tencent affiliate Han River Investment, a move that tightens his control of the company while removing a potential source of share-sale pressure.
Netmarble — one of South Korea's largest game companies, known for mobile titles such as "Lineage 2: Revolution" and "Solo Leveling: ARISE" — said Friday that the transaction came about as Han River Investment looked to sell part of its 18.1 percent stake in the company. Bang agreed to purchase 11.15 million shares at 33,538 won each, with the deal scheduled to close on Sept. 21.
The company said the agreed price reflects a block-trade discount to Netmarble's average share price over the month preceding negotiations.
Ownership shift
Once completed, the purchase 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. As a result, the gap between the two largest shareholders will widen from 6.82 percentage points to 33.65 percentage points.
Industry watchers say 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. Netmarble has been publicly traded since 2017, when its flotation on the Korea Exchange ranked as South Korea's largest IPO at the time.
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 its reason for the sale.
Financing and Tencent ties
Because 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 its business relationship with Tencent, which dates back to 2014, when Tencent invested 530 billion won in Netmarble's predecessor, CJ Games. The two companies will continue cooperating in the global gaming business and other sectors.
The transaction's remaining milestones are the Sept. 21 closing and the pending disclosure of the loan's collateral and other terms.
