(Yicai Global) June 4 -- Previously tipped to take over Nexon, Tencent Holdings has pulled out of the bidding to buy the South Korean gaming company.
The Chinese tech giant withdrew from the process after an evaluation, but two Tencent-invested South Korean internet and gaming companies, Kakao and Netmarble, submitted final offers, tech media 36Kr reported today. The two firms, MBK Partners, KKR and Bain Capital made final bids in an auction that closed on May 31.
The report did not elaborate on why Shenzhen-based Tencent backed out at the last minute. But it did cite a Korean internet entrepreneur as saying that many people consider Nexon, one of the country's three largest gaming companies, as too expensive. The market judges it to be worth CNY15 billion (USD2.17 billion).
Nexon founder Kim Jung Ju announced the planned sale of his and his wife's 98.6 percent stake in NXC, Nexon's parent company, in January. NXC holds 48 percent of the company.
Nexon subsidiary Neople has developed well-known games such as Dungeon and Warriors. Tencent secured the Chinese rights to the title in 2007.
Dungeon and Warriors generated USD1.5 billion of income last year, second only to Fortnite and Wangzhe Rongyao in free games, figures from Superdata show. Tencent pays more than KRW1 trillion (USD890 million) a year to Nexon for Dungeon and Warriors, the Maeil Business Newspaper reported.