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Commission to interview Nexon on alleged hostile takeover bid

2012/05/17 19:16:57

Taipei, May 17 (CNA) Taiwan's Fair Trade Commission said Thursday it will interview representatives of South Korean online gaming giant Nexon Co. next week in light of the company's alleged hostile takeover bid of Taiwanese gaming firm Gamania Digital Entertainment Co.

The commission will ask Nexon to comment on its definition of Gamania's market share, the particular field it defines Gamania as being in, and its current relations with Gamania -- vital information in discerning whether Nexon has violated Taiwan's Fair Trade Act, said Fair Trade Commission Chairman Wu Shiow-ming at a legislative meeting.

Taiwan's Fair Trade Act stipulates that any planned merger involving a company with more than a 25 percent market share in a particular field must be reported to Taiwan's authorities.

Local media has reported that Nexon holds more than 33 percent of Gamania's shares as of the end of March, over 10 percent more than holdings belonging to Albert Liu, Gamania's chairman and CEO.

Wu said the commission will "not just take Nexon's word for it," and stressed that it will follow judicial procedures to review the case.

In a statement dated May 14, Nexon said that it believes Gamania's market share is less than 25 percent of the overall Taiwanese digital content industry, which includes online games and other forms of digital entertainment.

In acquiring the shares, Nexon said it has made timely reports to Gamania and the government securities agency in Taiwan. Taiwan's government is currently checking the veracity of those claims.

Meanwhile, Gamania issued a statement Thursday, stating its insistence on remaining independent of the company's operating rights and its objection to the merger with Nexon.

Gamania, which is listed on the Taiwan Stock Exchange, was the first Taiwanese online game brand to expand outside of Taiwan, with branch offices publishing and developing digital entertainment content in Japan, South Korea and China.

Tokyo-listed Nexon began working with Gamania in 2005 to introduce a variety of popular online games, such as MapleStory and KartRider, to Taiwan gamers.

In 2007, Nexon publicly acquired a 10 percent stake in Gamania to further strengthen the strategic alliance and has since reportedly upped its holdings to 34.6 percent of Gamania's shares, becoming its biggest shareholder in the process.

Founded in Seoul in 1994, Nexon reported sales of 1 trillion won (US$900 million) in 2011, making it the first South Korean gaming company to hit this milestone.

(By Huang Chiao-wen and Ann Chen)