South Korea’s Netmarble Games among bidders for Caesars Interactive’s Playtika

South Korea’s Netmarble Games among bidders for Caesars Interactive’s Playtika

playtika-caesars-netmarble-auctionSouth Korea’s Netmarble Games Corp is making a play to acquire social casino operator Playtika from casino giant Caesars Entertainment.

On Tuesday, Korean business media outlet Pulse News reported that Netmarble, the mobile game unit of South Korean conglomerate CJ Group, had submitted a letter of intent to purchase Playtika. Netmarble is reportedly lining up financing for the next round of bids scheduled for Thursday.

Korea Economic Daily later reported that Netmarble was prepared to pay between KRW 4t-5t (US $3.4b-$4.3b) and that it was hoping to raise KRW 3t from South Korean institutional investors. Pulse claimed the Israeli-based Playtika would name a preferred bidder this month.

In May, reports surfaced that Caesars was mulling a sale of Caesars Interactive Entertainment (CIE), which includes Playtika, a real-money online gambling operation and the World Series of Poker brand. The reports claimed the companies expressing interest in CIE had valued the company at over $4b.

The Korean media reports suggest that Netmarble is solely interested in acquiring Playtika without the real-money gambling or WSOP businesses. Playtika’s assets could be absorbed into Netmarble’s existing business without having to go through the hassle of applying for gambling licenses in different markets.

Playtika is by far the most profitable asset operating under the CIE umbrella, with revenue of $725m in 2015 and projections for $900m in 2016, along with earnings of $350m.

Netmarble, which is preparing for a public offering later this year or early next, generated revenue of $868m in 2015 from its vast stable of mobile games, including Marvel: Future Fight, Hounds: The Last Hope and Raven (Evilbane) .

Caesars acquired Playtika in 2011 for $100m, the first of several social gaming acquisitions that were consolidated under the Playtika brand in 2014. The sticker prices being bandied about by Playtika’s suitors will ensure Caesars earns a handsome dividend on its investment.

Caesars Entertainment Corp (CEC) is still wrestling with its attempts to restructure its bankrupt main unit, Caesars Entertainment Operating Co (CEOC), from which CIE was spun off pre-bankruptcy. CEOC’s creditors have insisted that CEC should be forced to contribute billions more to the restructuring than CEC has offered to date. Billions, you say…