Kakao "Mobility 'Not for Complete Sale'... Considering Transition to Second Largest Shareholder"

[Asia Economy Reporter Kang Nahum] Kakao is considering a plan to sell only a 10% stake, rather than a 'block sale' of its affiliate Kakao Mobility's shares, remaining as the second-largest shareholder.

On the 6th, Bae Jaehyun, Kakao's Chief Investment Officer (CIO), stated in an internal notice, "The rumor that Kakao is considering a structure to sell a significant portion of its mobility shares is completely unfounded," adding, "We are considering transitioning to the second-largest shareholder by selling a 10% stake."

This is the first time a senior official at Kakao has mentioned the specific scale and plan for the sale of Kakao Mobility's shares. Currently, Kakao holds 57.55% of Kakao Mobility's shares, TPG holds 29.04% as the second-largest shareholder, and the Carlyle Group holds 6.21% as the third-largest shareholder.

Kakao believes that the reorganization of Kakao Mobility's shares is inevitable amid recent issues regarding platform monopolies and growing societal demands for transformative change.

CIO Bae explained, "Kakao has grown too large and heavy to respond quickly to these social demands as a small and agile startup," adding, "We tried to maintain the strengths of a startup through spin-offs, but this strategy has become burdensome to continue due to public opinion that shareholder value is being diluted."

He continued, "There are cases where Kakao and Kakao Mobility have conflicting positions regarding their directions and strategies for sustainable growth," noting, "For example, Kakao listens to societal concerns about monetization of mobility services, business expansion, and ultimately IPO (Initial Public Offering)."

However, he said, "We have been considering all alternatives and strategies from a broader perspective, and this week we also reviewed the shareholder composition change plan," adding, "No decision has been made yet on whether to proceed."

He further stated, "Kakao is working with various investors to create a shareholder composition change plan that mobility crew members can understand and be satisfied with, and once we are confident that this plan represents a better direction, we will provide detailed explanations to the crew."

Meanwhile, the Kakao labor union, which has opposed the sale of Kakao Mobility, resumed its signature campaign immediately after CIO Bae's notice was made public.

The union announced that on the same day, "We will hold a picket protest and press conference opposing the sale in front of the Kakao Mobility and Kakao Pangyo headquarters, and plan to take follow-up collective actions such as collective bargaining with Kakao Mobility to improve labor conditions."

During the first negotiation on the 27th of last month with the company side, including Kim Seongsu, head of Kakao Community Alignment Center (CAC), the union expressed its opposition to the private equity fund sale, but the company maintained its position that "no options other than the private equity fund sale are being considered."

Before the second negotiation, the union demanded the company to ▲ fulfill the moral responsibility of mobility management ▲ conduct reviews and discussions on employees and business directions ▲ explain the progress of Kakao Mobility's social responsibility fulfillment ▲ discuss platform workers and sale directions ▲ and include Kim Beom-su, head of Kakao Future Initiative Center, at the negotiation table.