A regulatory push to tighten rules on duplicate listings is shaking up platform companies’ subsidiary strategies. Kakao is moving to reduce the listing burden tied to its subsidiaries through a governance restructuring of Kakao Mobility. Naver, by contrast, is seeking to combine Naver Financial and Dunamu despite the regulatory burden, bringing payments, finance and virtual assets under one roof.
/ AI-generated image by ChatGPT
According to industry sources, Kakao, Kakao Mobility and Texas Pacific Group (TPG), the second-largest shareholder of Kakao Mobility, recently launched a shareholder value enhancement committee. The committee is a consultative body tasked with discussing ways to raise Kakao Mobility’s corporate value. It is known to be reviewing Kakao Mobility’s listing structure, investor exit options and possible governance restructuring.
Kakao Mobility is seen as facing an urgent need to provide an exit for existing investors. TPG Consortium, the second-largest shareholder of Kakao Mobility, invested 500 billion won and 140 billion won in Kakao Mobility in 2017 and 2021, respectively. With the investment period approaching 10 years, the consortium is considered to have reached a point where it needs to recover its investment through an initial public offering (IPO) or a stake sale. The problem is that it is difficult to push ahead with an IPO for Kakao Mobility. Kakao Mobility is a major affiliate of the Kakao group.
The government is pushing to ban, in principle, the duplicate listing of subsidiaries and affiliates of listed companies on the stock market. The move is based on the view that duplicate listings damage shareholder value and have contributed to lower corporate valuations and sluggish stock performance in Korea. One condition being discussed for exceptional approval of duplicate listings is securing consent from ordinary shareholders of the parent company.
Kakao says it has no plan to pursue an IPO for Kakao Mobility. A Kakao Mobility official said, “We are reviewing various options to enhance corporate value.”
Unlike Kakao, Naver is pressing ahead with Naver Financial’s merger with Dunamu through a comprehensive share swap despite the regulatory burden. Naver Financial and Dunamu disclosed that they plan to form an IPO committee within one year after completing the share swap and pursue an IPO within five years from the completion date. If Naver absorbs Dunamu, the operator of Upbit, it will have to respond to major shareholder ownership restrictions for virtual asset exchanges under the Basic Act on Virtual Assets as well as duplicate listing regulations from financial authorities.
Financial authorities have yet to release detailed guidelines on duplicate listing regulations. The Financial Services Commission and the Korea Exchange are said to be focusing on preparing detailed improvement measures to address the duplicate listing issue.
Lee Eok-won, chairman of the Financial Services Commission, said at a public seminar on duplicate listing system improvements in April that the plan to ban duplicate listings in principle is “an application of the duty of loyalty to shareholders to the listing system.” Lee said, “We will strictly distinguish between asymmetric duplicate listings and duplicate listings that create new value for all shareholders during the review process.”
댓글
0