Zynga rival Nexon's Tokyo IPO set at $1.2 billion
By Nathan Layne and Isabel Reynolds
TOKYO (Reuters) - Online gaming firm Nexon Co fixed the price for its $1.2 billion initial public offering on Monday at the mid-point of a pre-set range, following U.S.-based rival Zynga in settling for a more conservative valuation amid tough stock market conditions.
The public offering, Japan's biggest this year, was several times oversubscribed, reflecting investor expectations that the firm will continue to expand profits thanks to the increasing popularity of online gaming both domestically and overseas.
Nexon offers PC-based games for free while charging small amounts for in-game virtual items, a business model analysts see as relatively recession-proof.
"There are not that many Japanese companies with overseas growth stories. That makes it attractive," said Toru Hashizume, chief investment officer at Stats Investment Management. He declined to say if Stats would participate in the IPO.
Nexon said it would sell shares at 1,300 yen each, picking the middle of a book-building range of 1,200-1,400 after sounding out investors for the global offering last week, and coming in below the initial reference price of 1,360 yen.
It will list on the Tokyo Stock Exchange's first section on December 14, meaning it will be added to the TOPIX index, therefore drawing demand from index funds.
At the IPO price Nexon will raise about 91 billion yen ($1.2 billion) and boast a market value of 560 billion yen, roughly the same as mobile gaming firm Gree Inc, whose stock has jumped more than 7 times since listing three years ago.
The pricing came after Zynga, known for its success with games on Facebook, was forced last week to lower the expected valuation for its IPO this month, due to weak markets and macroeconomic uncertainty. Continued...