Plenus Entertainment, parent company of South Korean major Cinema Service, has unveiled plans to merge with Korea's largest online game company NetMarble.
The announcement comes only months after the collapse of a planned merger between Plenus and rival studio CJ Entertainment.
NetMarble, which has been 51% owned by Plenus since November 2001, has shown explosive growth since its launch in early 2000 by catering to Korea's robust online game community.
It currently accounts for 39% of the online game market with 19 million members, and posted a profit of $12.7m on total revenues of $22.5m in 2002. The company's net worth is estimated at $243m.
In carrying out the merger, Plenus Entertainment gains a more stable financial footing and a strong source of profits. NetMarble gains complete access to one of Korea's top providers of content in its bid to embrace video-on-demand and become a total entertainment portal.
Plans for the merger involve the issue of 6,953,321 shares of Plenus stock at a price of WON 20,582. That will result in an expanded equity base totalling 21,140,456 shares.
With so many shares being issued, ownership of Plenus will change dramatically. Following the merger NetMarble CEO Pang Joon-hyuk will hold 23.4% of the company's stock, while Cinema Service founder Kang Woo-suk's holding will drop to 5.9%, and Locus Holdings to 4.7% with the remaining 66% publicly owned.