Nexon Said to Hire Nomura in Biggest IPO by Japanese Company This Year

Nexon Co., the Asian developer of online games such as “Dragon Nest,” plans to raise as much as 100 billion yen ($1.3 billion) in an initial public offering, said two people with direct knowledge of the matter.

Nexon hired Nomura Holdings Inc. (8604), Morgan Stanley and Goldman Sachs Group Inc. (GS) to manage the offering in Japan, the U.S. and Europe, said the people, who declined to be identified before an announcement. The game maker will begin the IPO as soon as this week, and expects to list on the Tokyo Stock Exchange as early as Dec. 12, they said. The company is valued at about 600 billion yen, the people said.

The IPO would be the biggest by a Japanese company this year and the second largest in the technology industry worldwide in 2011, according to data compiled by Bloomberg. Tokyo-based Nexon and Gree Inc., whose shares have more than doubled this year, aim to benefit from the growing popularity of games that let people in different places play together on the Internet.

“Investors around the world are happy to inject their money in areas where they can see growth,” said Kazumi Tanaka, an IPO analyst at T&C Financial Research Inc. in Tokyo. “Nexon may use the money to acquire competitors and to find talented people to develop the business.”

Nexon has been preparing a Japan listing and is open to buying more companies after making acquisitions in South Korea, Chief Executive Officer Choi Seung Woo said last December.

Quake Recovery

A total of 31 Japanese companies have announced IPOs this year, the most since 2008, Bloomberg data show, in a sign that the equity capital market is beginning to recover from the March earthquake.

“Nexon has been aggressive in M&A, so they may invest more in that area,” said Jeong Dae Ho, a Seoul-based analyst at LIG Investment & Securities Co. “They may use the proceeds from the IPO to invest overseas to strengthen global channels and to be able to directly source content in other countries.”

Nexon, which develops games including “KartRider” and “MapleStory,” has operations in South Korea, where it was founded, as well as the U.S. and Europe.

“As we pursue our strategic objectives, we regularly review our options for accelerating our growth,” Nexon’s Seoul office said in an e-mailed response to questions on the IPO. “We have made no decisions or announcements about any specific financing or other plans and cannot comment on rumors.”

Keiko Sugai, a Tokyo-based spokeswoman for Nomura, declined to comment, as did Hiroko Matsumoto, a spokeswoman for Goldman Sachs in Tokyo, and Natsuo Nishio for Morgan Stanley. (MS)

Rival Gree, which provides a social network as well as games, has climbed 171 percent on the Tokyo Stock Exchange this year, increasing its market value to 649 billion yen. It’s the fifth-best performer on the benchmark Topix Index.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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