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Nexon sells shares in NCSoft, ending takeover bid

Korean publishers end hostile relationship in $533m deal

Korean publishers Nexon has sold off its 15.08 per cent share in NCSoft for $533 million, at a price of $161.38 per share, 7.4 per cent below the closing price on October 15. NCSoft CEO Kim Taek-jin increased his stake to 12 per cent with a 440,000 share buy.

The sale ended four years of aggressive posturing during which Nexon attempted to win control of its rival's board by buying up shares and trying to impose conditions on the running of the company, reports Business Korea. Nexon has been the biggest third party shareholder in NCSoft since 2012, when it bought 14.68 per cent of the firm's stock from Kim Taek-jin. When it upped that amount to just over 15 per cent last year Nexon was obliged to declare its interest by the Fair Trade Act, which prompted protest from NCSoft, concerned about the possibility of a hostile takeover.

Although Nexon denied this at the time, come January this year, they declared an intention to take part in the management of NCSoft, issuing a shareholder's suggestion document which included agenda items for corporate meetings, a demand to disclose the salaries of some executives and a request for a list of remaining shareholders, presumably so they could be approached to sell and increase Nexon's holding.

However, some quick thinking from NCSoft resulted in a share-trading scheme with NetMarble, which focuses on mobile publishing. NCSoft received an 9.8 per cent share in NetMarble, swapping it for 8.9 per cent of its own stock and launching an ongoing strategic partnership. Because NCSoft's company owned stock hadn't previously given it voting rights, giving that stock to a friendly partner reestablished their control of the board room and set back Nexon's plan, eventually leading to the current sale.