"The spin-off is structured so that all shareholders receive shares of both companies in the same proportion, and the controlling shareholder's stake remains unchanged before and after the split."
Shin Jong-hwan, Kakao's Chief Financial Officer (CFO), responded to this question during an online 'Kakao Corporate Governance Reform Meeting for Minority Shareholders' held on the 16th: "Is the purpose of the spin-off to strengthen the controlling shareholder's power?" Shin added that there are no plans for follow-up transactions such as a rights offering via cash contribution (paid-in capital increase) or a transition to a holding company structure under the Monopoly Regulation and Fair Trade Act.
Last month on the 21st, Kakao announced a corporate restructuring plan to spin off its Tok platform, Map platform, advertising, and commerce businesses into a newly established entity named 'KakaoAI', while renaming the surviving company composed of fintech, content, mobility, and investments as 'KakaoX'. The meeting was held to explain the background and expected effects of the initiative to minority shareholders.
Kakao maintained its previous stance that the purpose of the spin-off is to resolve the undervaluation of corporate value. Kim Do-young, Kakao Group Investment Strategy Division Chief-designated as CEO of KakaoX, stated, "Resolving the conglomerate discount was one of the factors leading to the decision for the spin-off," and added, "The market has demanded that we clearly define our identity as an AI company."
Kakao explained that both KakaoAI and the investment-focused company KakaoX are expected to see reduced discounts. Division Chief Kim said, "Currently, subsidiaries are valued at a discount compared to the parent company Kakao," and noted, "Following the spin-off, we will be able to share more detailed plans and performance regarding the subsidiaries than before."
They also shared updates on preparations for an 'Integrated Membership'. Jeon Hyun-soo, Kakao's Business Overall Leader, stated, "We are currently preparing an integrated membership that connects group services such as mobility, content, and commerce into one, centered around user touchpoints in KakaoTalk," and added, "At this stage, we are designing and validating the business model ahead of official launch. We will provide details on specific benefits and the launch date once they are finalized."
Kakao will address the approval of the spin-off plan at an extraordinary shareholders' meeting scheduled for December 17. If the proposal passes, the split is expected to be completed by January 1 next year, with KakaoX undergoing a change of listing and KakaoAI relisting on the same day, the 27th.
The split ratio was determined based on book value of net assets as KakaoX 0.64 and KakaoAI 0.36. However, the final ratio may slightly change after the accounting firm prepares revised consolidated financial statements following the split effective date on January 1 next year. Division Chief Kim explained, "There may be slight changes in the numbers, and there is also a possibility of schedule adjustments depending on future stock exchange approval procedures."
in TECH
