Kakao Ent. Co-CEOs Deny Reports of Company's Sale, Claim Reports are 'Misunderstanding'
Statement follows media reports last week that Kakao plans to sell Kakao Entertainment subsidiary
According to a report from Hankook Economy published on April 8th, it was announced that Kakao, one of Korea's largest technology companies, is considering selling its subsidiary Kakao Entertainment. This marks a departure from their previous plan to take the company public.
Based on information from investment banks, it is reported that Kakao Corporation communicated its intentions regarding management control transfer to significant investors in Kakao Entertainment such as Anchor Equity Partners, Saudi Arabia's Public Investment Fund (PIF), and Singapore's GIC in a written document.
On April 10th, Kakao Entertainment's co-CEOs, Ki-su Kwon and Yoon-jung Jang, responded to recent rumors about their company being sold by stating in an internal memo that these reports were simply misinterpretations of ongoing discussions with financial investors about possible equity changes and potential new investment partners.
Since its inception as Kakao Page in 2019, Kakao Entertainment has been planning to go public through an initial public offering (IPO). However, the company encountered obstacles such as criticism over a proposed "split-listing" approach, leading them to temporarily halt their plans.
According to recent reports, Kakao Entertainment has a valuation of approximately US$8.2 billion or 11 trillion KRW due to a 1.2 trillion KRW investment from PIF and GIC in early 2023. Several potential buyers are interested in purchasing the company, including major gaming companies like NCSoft and Krafton, large entertainment firms such as HYBE, and leading private equity funds.
Kakao Entertainment has three main areas of focus: music, stories, and media. They spent about $770 million in 2022 on acquiring Radish and Tapas, which are North American platforms for web novels and webtoons.
Sources: Hankook Economy ( link ) , (Jong-kwan Park, Joon-ho Cha, Da-eun Choi), YNA ( link ) (Kyung-yoon Kim)
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