Kakao Holds Second Minority Shareholder Meeting on Personnel Spin-Off... "Subsidiary Sale Was Never Discussed"

"The personnel spin-off is unrelated to subsidiary sales... It has never once been discussed"
"We will ensure the value of Kakao X's subsidiary businesses is fully reflected"}

Kakao said on October 20 that it held its second meeting with minority shareholders to engage with them.

The meeting was held simultaneously online and offline at the FKI Tower Conference Center in Yeouido, Yeongdeungpo-gu, Seoul. Key executives, including Kim Doyoung, CEO-designate of Kakao X, and Shin Jonghwan, Kakao's chief financial officer (CFO), attended.

Kakao said on the 20th that it held its second meeting with minority shareholders and communicated with them. Kakao Chief Financial Officer (CFO) Shin Jonghwan, KakaoX CEO-designate Kim Doyoung, and Kakao Business Performance Leader Jeon Hyeonsu are communicating with shareholders at the meeting. (From left) Kakao.

At the meeting, executives exchanged views with minority shareholders on topics including the purpose of the personnel spin-off, growth strategies after the spin-off, and ways to enhance corporate and shareholder value.

The meeting lasted 90 minutes and focused on questions and answers. Kakao said that, unlike the first meeting, which was held online only, it expanded the event to include both online and in-person participation, broadening opportunities to engage with shareholders.

Kakao also again ruled out the possibility of selling its subsidiaries. When asked whether it might sell financial subsidiaries such as Kakao Pay, Kim Doyoung, CEO-designate of Kakao X, dismissed the possibility, saying, "The personnel spin-off has absolutely nothing to do with the sale of subsidiaries" and that it was "an unfounded rumor that has never once been discussed."

At the meeting, a shareholder asked whether Kakao X might be undervalued by the market because of its business structure centered on subsidiaries. Kakao responded that, after the spin-off, it would disclose the performance and growth strategies of key businesses, including tech-finance, content, and mobility, so that the value of each business would be adequately reflected in the market's assessment.

Shareholders also asked why the personnel spin-off was necessary. Kakao emphasized that structural change was needed to respond to rapid developments in the artificial intelligence (AI) industry, and that the spin-off would increase the specialization of each business and speed up decision-making, thereby enhancing corporate and shareholder value.

Regarding shareholder returns after the spin-off, Kakao explained that Kakao X would use 30% of its subsidiary dividend income and 30% of its investment gains, respectively, as sources of shareholder returns, and would pursue share repurchases and cancellations totaling 300 billion won after the spin-off. Kakao AI reaffirmed its plan to allocate 20% to 35% of its adjusted standalone shareholder free cash flow (FCF) to shareholder returns, and to raise the return ratio to as much as 40% if FCF increases by 50% or more year over year.

Kim said, "A key objective of this restructuring is to enhance corporate and shareholder value through the personnel spin-off. While swiftly carrying out our growth strategy, we will do our utmost to build trust by fully explaining the purpose of the spin-off and our future growth strategy to our shareholders and listening carefully to their views."

This content was produced with the assistance of AI translation services.