Tencent Studies Deal for ‘Dungeon & Fighter’ Developer Nexon (3)

Tencent Holdings Ltd. is studying a potential deal for Nexon Co., as the Chinese internet giant looks for ways to bolster its lucrative gaming operations, people with knowledge of the matter said.

Shenzhen-based Tencent has reached out to the family of Nexon’s late founder Kim Jung-ju to discuss the possibility of an acquisition, the people said, asking not to be identified because the information is private. Kim’s family has been speaking to advisers and evaluating options, according to the people.

Nexon’s shares surged as much as 10% in Tokyo on Friday, eventually closing up 8.4%, the biggest gain since ...