Kakao has put the brakes on Kakao Mobility's push to list American depositary receipts (ADRs) in the United States. It judged that the listing plan under review focuses on liquidity for second-largest shareholder TPG's existing stake, making it hard to see it as returning economic benefits to Kakao's common shareholders.

A filing on Sept. 23 showed Kakao's board discussed the impact of Kakao Mobility's ADR listing on Kakao and common shareholders and shareholder protection measures. It resolved to oppose moving ahead with the listing under the current structure.

Kakao Mobility has set up a shareholder value enhancement committee in which TPG, the second-largest shareholder, has secured a majority of seats. It has reviewed various options for financial investors to recover their investments. One option under review was a U.S. ADR listing.

Kakao Mobility on July 2 confidentially submitted a Form F-1 registration statement to the U.S. Securities and Exchange Commission for the ADR listing offering.

The ADR listing under review is structured to focus on liquidity for TPG's existing stake rather than raising funds through issuing new Kakao Mobility shares. Under the plan, ADRs would be issued backed by TPG's Kakao Mobility stake and sold for liquidity in the U.S. market. Even if the listing proceeds, no new funds would flow directly to Kakao or Kakao Mobility.

Kakao judged that under this structure benefits would be concentrated on liquidity for shares held by a specific financial investor, while it is difficult to assess it as leading to economic gains for common shareholders.

It also cited the burden from a dual listing as a reason for opposition. Kakao said it was concerned about a split in investment demand between Kakao and Kakao Mobility, an expansion of the net asset value (NAV) discount for Kakao due to a dual listing, increased complexity in valuing the companies and potential conflicts of interest between the two companies' shareholders. It also considered that Kakao would have to bear liability under U.S. securities law.

Kakao also judged that even compared with other possible alternatives, the current form of the ADR listing is difficult to view as a clearly superior option in terms of benefits for Kakao's common shareholders.

It also reflected that, with no funds flowing directly into Kakao, there are limits to addressing an imbalance in economic benefits even if separate shareholder protection measures are 마련ed.

The decision has put the brakes on pursuing an ADR listing under the current structure focused on liquidity for TPG's stake.

Kakao said it is not denying the need for Kakao Mobility's financial investors to recover their investments. It said it could review the listing plan again if the listing structure changes or if the economic benefits accruing to Kakao or Kakao's common shareholders change. It also explained it could discuss the matter again if a review or a new resolution is needed at the request of regulators.

Kakao said it will disclose the related details again once specific 내용 is finalised or within 6 months. The scheduled date for the renewed disclosure is March 19, 2027.