[비즈톡톡] Nexon to take over Bithumb… “It was an expected scenario”

Input 2021.01.09 06:00

Value of Bithumb 650 billion won… It’s 1 trillion won if you can’t
From police investigation to Bitcoin surge… Sluggish sales support
Industry “There was no option other than Nexon”

On the 7th, the news that Nexon’s founder, CEO Kim Jung-joo, NXC (Nexon Holding Company), is going to take over the cryptocurrency exchange’Bithumb’, made the investment banking (IB) industry as well as the game industry and the cryptocurrency industry roar. This is because it is a very large transaction as the nation’s largest game company buys the nation’s largest cryptocurrency exchange, and it is expected that the synergy between the two will appear in the future. At the same time, industry insiders responded that the deal was “the expected result.” It is said that Nexon is the only place to buy Bithumb in Korea. For what reason.

According to related industries on the 9th, it is known that NXC recently signed a memorandum of understanding (MOU) stating that it will buy a stake held by Bithumb’s board chairman Lee Jung-hoon. It is said that Bithumb’s corporate value is about 650 billion won, and the 60% stake is taken over at 500 billion won.

As the main contract has not yet been signed, variables remain, but it is an assessment that it is a great progress in the situation where the sale was continuously sluggish. Bithumb selected Samjung KPMG as the organizer in August of last year and began selling it, and received preliminary bidding from investors in September next month. As expected, at the latest at the end of last year, a preferred negotiator had to be selected and the deal had to be in the final stage.

The reason for the delay in the transaction is the fraud case of Chairman Lee Jung-hoon. Chairman Lee is currently under investigation for pre-selling cryptocurrency BXA Coin for listing in October 2018, but not actually listing it. From this year, cryptocurrency businesses can operate only after obtaining permission from the Financial Information Analysis Institute (FIU) in accordance with the newly enforced’Reporting and Use of Specific Financial Transaction Information Act (Special Law). If Chairman Lee is punished by any chance, he is in danger of disrupting the business of the exchange due to his permission not being granted.

Bitcoin, which suddenly started on the rise, was also a reason to worry. Bitcoin, which had been between 10 million and 15 million won, surpassed 20 million won in November last year, 30 million won in December, and 40 million won as of January. An official from the IB industry said, “The rumors that the deal is close to close began in November, but in the process of negotiations, the bitcoin value held by Bithumb has risen too much,” he said.

However, it is evaluated that Bithumb’s corporate value is in the range of 600 billion won despite the rise in bitcoin price, which is far below the market level. If not, it would reach a value of 1 trillion won, but it was a big discount. Here is the reason why only Nexon has to buy Bithumb.

Another IB industry official said, “How many companies can invest 500 billion won or 600 billion won in Korea?” and “If you look at the relevance to the virtual currency business, you are selected as information technology (IT) companies. “I said. He continued, “Naver and Kakao have already entered the financial business such as pay, banking, and securities, and have a burdensome aspect of their business. It is because virtual currency is an industry that financial authorities hate. Then, only game companies remain, but Bithumb’s position. “The last hope in the game would have been Nexon.”

Nexon has shown greater interest in cryptocurrency-related businesses than other major game companies such as NCsoft and Netmarble. In 2017, it bought a 65% stake in the cryptocurrency exchange Kobit, and in 2018, it also acquired Bitstamp, the largest cryptocurrency exchange in Europe. At the end of the same year, it also invested in Tagami, an American cryptocurrency company. CEO Kim Jung-joo also established a subsidiary ARQUES in February of last year, and began to develop a platform to invest in various financial assets including virtual currency.

In terms of having to sell Bithumb as soon as possible due to the police investigation, there are not many options, and it is observed that selling at a low price to Nexon, which actively pursues acquisitions, would have been judged to have been better than raising uncertainty. There is also a story that a large domestic IT company offered to buy Bithumb for 2 trillion won and was rejected 3-4 years ago when the cryptocurrency craze was just starting to blow. Looking back at the situation at that time, this deal was a painful decision for Bithumb.