Yahoo Finance Saudi Investment Talks Boost Kakao Group’s Battered Shares
(Bloomberg) -- Shares of Kakao Group got a much-needed boost following reports that Saudi Arabia’s wealth fund is planning a large-scale investment in the South Korean internet giant’s entertainment unit.
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The Public Investment Fund is in talks with Singapore’s GIC Pte Ltd. to jointly fund up to 800 billion won ($591 million) ahead of Kakao Entertainment Corp.’s initial public offering due next year, Maeil Business Newspaper reported Tuesday evening, citing unidentified people in the banking industry.
The talks follow Saudi Crown Prince Mohammed bin Salman’s much-hyped visit to Seoul last week, which produced a raft of investment deals for Korean conglomerates worth $30 billion, according to local media. “We are reviewing various options for pre-IPO but nothing has been decided,” a spokesperson at Kakao Entertainment said.
Kakao Corp.’s shares rose as much as 6.3% on Wednesday before paring by about half, while Kakaopay Corp. erased most of its 12% rally. Kakao’s banking and gaming companies also advanced.
The group, whose ubiquitous business and outsized influence have drawn public scrutiny, has suffered a relentless selloff in shares for most of this year. Wednesday’s advance still barely makes a dent in the downtrend as Kakao Corp. remains about 50% down for the year, while Kakao Games Corp. has lost more than a half of its value.
Read: Data-Center Fire Deepens Kakao Selloff as Public Opinion Sours
Saudi Arabia has been beefing up investment and business ties with Korean companies, becoming a major shareholder of NCSoft Corp. as well as Tokyo-listed Nexon Co. this year.
Kakao Entertainment has been considering a New York IPO for 2022 with a $18 billion valuation, the company’s top executive told Bloomberg last year, though the timeline now looks uncertain.
The Pangyo-based entertainment company, whose online web cartoons or “webtoons” are popular at home and in Japan, has been expanding its businesses overseas through multiple startup acquisitions including Tapas Media and SoftBank-backed Radish.
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