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[Alpha Biz=(Chicago) Reporter Kim Jisun] Kakao Entertainment will seek to raise up to 100 billion won through the sale of its stake in its subsidiary Starship Entertainment.
According to the investment banking (IB) industry on the 9th, Starship Entertainment decided to sell about 30% of its stake to outside by combining the sale of old shares and the issuance of new shares and began negotiations with private equity funds at home and abroad. The share of shares subject to sale is higher in old shares. Kakao Entertainment, the parent company, is said to want up to 1 trillion won in corporate value for Starship Entertainment.
Starship Entertainment was founded in 2008 by Vice President Seo Hyun-joo, who went through JYP Entertainment and Big Hit Entertainment (currently HYBE). Vice President Seo sold 70% of his 100% stake in Starship to former Loen Entertainment in December 2013 for about 15 billion won, and Loen was later acquired by Kakao.
In 2019, Kakao Entertainment and some executives of the company carried out paid-in capital increase and completed the formation of current shareholders such as Kakao Entertainment (59.73%) and Seo Hyun-joo (19.46%). It is necessary to sell the stake by next year by specifying the conditions for listing (IPO) within five years in the contract at the time of bequest.
Kakao Entertainment decided that it was the right time to sell its stake as the value of its comparative business group soared due to the recent rise in stock prices of local entertainment companies.
Starship Entertainment is expected to raise up to 100 billion won once the stake is sold, spurring the promotion of new businesses. In particular, as Ive has been actively entering the North American market since early this year, it is expected that a considerable amount of funds will be invested in exploring overseas markets.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
