Kakao Mobility CI

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Kakao Mobility Corp. has denied speculation that its parent company Kakao Corp. is seeking to sell management control.

According to industry sources, Kakao Mobility Chief Financial Officer Yoo Young-joong told employees in an internal message on Thursday that “Kakao Mobility is a core part of Kakao’s business portfolio, and Kakao has no intention of selling its management control.”

“Kakao confirmed that there have been discussions between shareholders and investors regarding the potential replacement of financial investors in Kakao Mobility,” Yoo added.

However, he said that “the terms of the deal have yet to be finalized.”

Kakao is currently in talks to replace key financial investors in Kakao Mobility.

The leading candidate is South Korean private equity firm VIG Partners, which is pursuing a deal to acquire over 40 percent of the company’s shares held by TPG (29.04 percent), Carlyle (6.18 percent), and Korea Investment & Securities and ORIX PE (5.35 percent).

Kakao is the largest shareholder in Kakao Mobility with a 57.3 percent stake.

Kakao Mobility’s corporate value is estimated at about 5.5 trillion won ($3.87 billion), and the share transaction is expected to be worth just over 2 trillion won ($1.41 billion).

The controversy erupted as speculation grew that Kakao might sell its management control as part of the deal.

The Kakao labor union held a press conference on Thursday and said that VIG hopes to acquire more than 50 percent of Kakao Mobility, including Kakao’s stake, aiming for management control.

“We oppose private equity firms taking over the company’s leadership,” the union said.