Nineyou International, an online gaming company, has pulled its $158m (€113m) initial public offering from Japan's Hercules market, in what would have been the first Chinese listing on the Osaka exchange.

Shanghai-based Nineyou announced it will postpone the offering after South-Korean T3 Entertainment said it was planning to take legal action against the company. Morgan Stanley was advising the deal which was expected to start trading on the Osaka Securities Exchange's Hercules market on Thursday.