As Kakao's content subsidiary, Kakao Entertainment, continues to reorganize its subsidiaries, rumors of a sale have emerged.
According to investment banks (IB) and related industry sources on the 9th, Kakao has reportedly sent letters to major shareholders of Kakao Entertainment, including Anchor Equity Partners, the Saudi Arabian Public Investment Fund (PIF), and the Government of Singapore Investment Corporation (GIC), expressing its intention to sell its management rights.
The reason Kakao Entertainment has been selling off its subsidiaries is due to the ongoing losses of these subsidiaries, which have increased the financial burden on Kakao Entertainment.
Last year, Kakao's content division generated sales of 3.971 trillion won, a 1% decrease compared to the previous year.
Kakao Entertainment owns Kakao Webtoon, the web novel platform Kakao Page, and Melon, among others. In 2022, it expanded its business by acquiring the North American web novel platforms Radish and Tapas, as well as the entertainment agency Antenna.
Kakao Entertainment is currently valued at approximately 11 trillion won, with its largest shareholder, Kakao, holding a 66.03% stake. Anchor Equity Partners, a Hong Kong-based private equity fund (PEF), is the second-largest shareholder with about 12% ownership, while China's Tencent holds approximately 4.5% of the shares.
Industry insiders speculate that Kakao's push to sell Kakao Entertainment is part of a management efficiency strategy and a response to the failure of its IPO (initial public offering). The company's focus on streamlining non-core businesses outside of KakaoTalk and artificial intelligence (AI) is also seen as a reason for pursuing the sale of Kakao Entertainment.
Regarding the sale of Kakao Entertainment, Kakao has stated that "it is difficult to confirm."
