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[Alpha Biz=(Chicago) Reporter Kim Jisun] Kakao Pay has been seeking to acquire management rights of US securities firm Siebert to expand its global business since early this year. However, mergers and acquisitions (M & A) eventually failed as Siebert Financial expressed its difficulty in proceeding with the contract due to judicial risks.
According to the Darts of the Financial Supervisory Service on the 20th, Kakao Pay announced that it would not proceed with the second transaction with the agreement between the two companies regarding the acquisition of Siebert shares.
Kakao Pay originally planned to acquire a 51% stake on two occasions to take over management rights of Siebert. As a result, it spent 1.9082 trillion won in May to acquire 8,075,607 shares (19.90%) and the rest will be purchased by the end of this year.
However, since then, Kakao, the parent company, has been investigated by authorities and prosecutors on charges of manipulating the market price of SM Entertainment, which has disrupted the acquisition of management rights. In October, prosecutors indicted Bae Jae-hyun, head of Kakao's investor division, and Kakao's corporation on charges of violating the Capital Market Act.
Last month, a total of six people, including former Kakao founder Kim Bum-soo, Kakao CEO Hong Eun-taek, Kakao Entertainment's respective CEOs Lee Jin-soo and Kim Sung-soo, and two law firm lawyers, were sent to the prosecution without physical detention for questioning.
As the second transaction fell through, Siebert decided to pay Kakao Pay a $ 5 million settlement. Seibert will pay the settlement over a total of 10 quarters from March next year to June 2026.
However, Kakao Pay has decided to remain a member of the board of directors of Siebert.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
