Kakao has pushed back its planned corporate split by one month to February 2027, as a preliminary relisting review by the Korea Exchange takes longer than expected, while accelerating a 150 billion won ($112 million) share buyback and cancellation plan to bolster shareholder confidence ahead of the restructuring.
The company said Thursday that its board had approved the revised schedule, delaying the separation into Kakao AI and Kakao X from Jan. 1 to Feb. 1. An extraordinary shareholders meeting will now take place on Jan. 15 instead of Dec. 17, while Kakao X's change listing and Kakao AI's relisting have been postponed from Jan. 27 to Feb. 25.
Kakao attributed the delay to a prolonged preliminary relisting review and said the timetable could change further depending on consultations with relevant authorities.
Announced in August, the restructuring will separate Kakao's core platform and artificial intelligence operations from its investment businesses.
The newly established Kakao AI will operate KakaoTalk, advertising, commerce and AI services, while Kakao X, the surviving company, will manage affiliate stakes and investments.
The plan has raised concerns among securities firms over a potential holding company discount for Kakao X and uncertainty surrounding the profitability of Kakao's AI business.
To bolster shareholder confidence, Kakao will begin repurchasing 150 billion won in shares on Friday, earlier than originally planned. The buyback will be funded by cash dividends from Kakao Investment. All repurchased shares will be canceled.
The move brings forward half of the company's previously announced 300 billion won buyback and cancellation program, initially scheduled to begin after the split. Kakao X is to repurchase and cancel the remaining 150 billion won worth of shares by the end of 2027.
Kakao said the accelerated buyback underscores its commitment to shareholder returns ahead of the restructuring.
The company also revised the allocation of assets between the two entities, assigning an additional 263.6 billion won to Kakao AI to strengthen its financial position.
The adjustment will increase Kakao AI's net assets from approximately 2.9 trillion won to 3.2 trillion won. The additional funds will be used to acquire assets related to its business, with specific investment plans subject to board approval and other procedures.
Following the revised allocation and planned share cancellation, Kakao X's share of the split will decline from approximately 63.5 percent to 61.1 percent, while Kakao AI's will increase from 36.4 percent to 38.8 percent. The final ratio remains subject to minor adjustments.
Kakao said its previously announced postsplit shareholder return policies will remain unchanged.
Kakao X plans to return 30 percent of after-tax dividends received from subsidiaries and 30 percent of investment gains after capital costs and taxes to shareholders.
Kakao AI will allocate 20 to 35 percent of its adjusted standalone free cash flow to shareholder returns, with the payout ratio potentially rising to 40 percent if cash flow increases by at least 50 percent on-year.
yeeun@heraldcorp.com
