Netmarble named candidate to take over for Woongjin Coway

Netmarble Corp., South Korea’s leading online game publisher, is set to take over Woongjin Coway, the country’s top home appliance rental service company, through purchase of the controlling stake of 25 percent for an estimated 2 trillion won ($1.7 billion).

The game company disclosed Monday that it was informed Woongjin Group approved of the choice of Netmarble as the exclusive candidate to acquire a 25.08 percent stake in home appliance rental business Woongjin Coway.

Netmarble has offered the highest bidding price of 100,000 won per share or around 1.8 trillion for the 25.08 percent stake. A stock purchase agreement is expected to be signed by the end of this month to close the deal within this year.

On Monday, Netmarble lost 0.75 percent to end at 92,100 won, while Woongjin Coway gained 0.98 percent to 82,200 won.

Netmarble last month suddenly jumped in the race over Woongjin Coway, helping to heat the three-way buyout contest that lost steam after SK Networks Co., which owns the country’s other major home appliance rental service, bowed out due to trouble in sourcing funds to buy the competitor.

“The sale deal could have fallen through after the abandonment by earlier big names like Carlyle Group and SK Networks,” said an unknown industry expert.

The American private equity dropped out of the race due to a hefty price tag while SK Networks was weighed down by its balance sheet. SK Networks’ current debt ratio already exceeds 300 percent.

Netmarble, on the other hand, sits on 4.7 trillion won in equity capital and 1.7 trillion won in cash and cash equivalent assets.

Netmarble’s second largest shareholder is CJ ENM Co., entertainment unit of retail giant CJ Group, with a 21.85 percent stake. CJ Group has been keen on adding a home appliance rental business and attempted taking over Woongjin Coway in 2017. Industry observers expect that Netmarble’s successful acquisition of Woongjin Coway would pave the way for CJ ENM to tap into the home appliance rental service. But a CJ Group official denied the company’s active role in the buyout process led by Netmarble.

Woongjin Group placed Woongjin Coway stake out for sale in June this year, just three months after it repurchased the unit due to financial issues caused by the group’s solar cell manufacturing unit Woongjin Energy. Woongjin had to let go the rental service six years ago due to financial troubles.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]