이 기사는 2019년 10월 18일 08시00분 thebell에 표출된 기사입니다

Doubts are being raised about South Korean mobile games maker Netmarble's bid for Woongjin Coway.

Netmarble has announced on Monday that it was selected as the preferred bidder for Woongjin Group's water purifier rental unit Coway. The nobile games maker, which initially was not included in the seller's shortlist, joined the final bidding held last Thursday in an unexpected move.

About its decision to invest in Coway, Netmarble explained that the rental platform would serve as a new growth engine for the firm. Still, many in the industry are casting doubts on why the games maker didn't follow the normal procedure.

Those joining M&A tenders generally appoint advisory firms for due diligence as there are so many things to consider from financial, accounting and legal aspects before making a decision on a deal usually involving large-scale financing. Reportedly, however, Netmarble has only just begun to look for advisory firms. "It is not understandable that [Netmarble] was named as the preferred bidder without even hiring advisory firms," said one investment banking industry source.

There were some cases in the past where two counterparties signed a deal without the help of advisory firms. But these are limited to companies in the same industry, which is not the case for Coway and Netmarble.

Industry watchers point out that Netmarble's final bid was based on preliminary due diligence conducted on its own, while the games maker does not much understand the rental business. This is contrary to other shortlisted bidders, including SK Networks, who asked the seller to postpone the final bidding, spending almost two months in due diligence.

"It is widely known that Netmarble, who also tried to acquire Nexon earlier this year, is keen to diversify and boost its business portfolio. But it's hard to understand that [Netmarble] submitted a 1.8 trillion won bid without proper due diligence," one M&A industry source said.

Another source said, "It's possible to roughly estimate the transaction value based on Coway's stock price, but the stock price does not reflect all factors of enterprise value. The move is far from a normal process in that [Netmarble] didn't properly review factors affecting valuation through due diligence in advance."

(By reporter Kim Byung-yoon)