Korean entertainment giant CJ ENM denied rumors on Feb. 19 that it intends to sell off its 21.96 percent of stakes in mobile gaming giant Netmarble, which was worth some 2.24 trillion won (US$1.99 billion) valued at the previous day’s stock price.
"CJ ENM is not on the move to sell off Netmarble stakes," CJ ENM said in a disclosure. This came after stock market operator Korea Exchange had ordered CJ ENM to clarify the rumors by 6 p.m. on Feb. 19.
Courtesy of Netmarble
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Netmarble shares slipped 2.1 percent compared to the previous trading day, paring losses from a plunge -- up to 9.6 percent -- following the news reports about the rumored deal in morning trading. Its market cap came to 9.98 trillion won.
The reports said CJ ENM, the second-largest shareholder of Netmarble holding 18.72 million shares, was considering selling off its entire stake. It added that Netmarble Chairman Bang Jun-hyuk and Tencent’s special purpose company hold preemptive rights and tag-along rights to the stake. Based on these clauses, the two parties can join the deal and sell their shares at the same terms so that the new owner purchases these interests.
Bang is currently the largest shareholder of Netmarble with a 24.31 percent stake roughly valued at 2.48 trillion won. Other shareholders include Tencent, NCSoft and the National Pension Service.
Speculations about CJ ENM and Netmable increased after the firm recently announced that it would sell its controlling stake in pay TV provider CJ HelloVision to local telco LG Uplus, for 800 billion won.
In 2018, Netmarble’s net profit fell by 16.6 percent on-year, while its operating profit more than halved, according to its preliminary annual report. The firm has joined the race to bid for takeover of NXC, holding company of Korean-Japanese gaming giant Nexon.
Founded in 2001, Netmarble was sold to CJ ENM for some 80 billion won, but CJ later invited Chairman Bang and Tencent as major shareholders through new stock issuances in 2012 and 2014, respectively. Netmarble went public on the main bourse KOSPI in 2017, causing its stock value to double.
By Son Ji-hyoung (email@example.com)