Kakao Bank issues new shares to major U.S. hedge fund

Logo of Kakao Bank [KAKAO BANK]

Kakao Bank is issuing 31.9 million new shares and selling one-third of them to a major U.S. hedge fund.

The new shares, approved by the board on Tuesday, will expand the number outstanding from the current 365 million. They are priced at 23,500 won ($21) a piece, meaning that San Francisco-based TPG will be investing about 250 billion won in the company.

While Kakao Bank declined to confirm the percentage of the company the hedge fund will own after the transaction, based on the shares outstanding, it will have about 3.7 percent of the stock of the online-only bank.

In the Nov. 12, 750-billion-won transaction, the existing shareholders will purchase new shares proportional to their existing ownership of the company.

Kakao Bank is currently valued at 8.6 trillion won, according to the company.

TPG Capital is an American hedge fund with offices in San Francisco and Dallas-Fort Worth. It manages around $103.3 billion in investments and has stakes in the car-sharing service Uber, music streaming service Spotify, and Chinese Ant Financial.

It also has a 27 percent stake in Kakao Mobility.

Kakao Bank’s largest shareholder is Kakao, which has a 33.5 percent stake. Korea Investment Value Asset Management owns 26.6 percent, KB Kookmin Bank owns 9.9 percent and Korea Investment Holdings has 4.9 percent.

The online bank is planning an initial public offering (IPO). Kakao Bank said it will submit a bidding proposal and decide on the underwriter for the IPO by the end of this year.

BY KANG JAE-EUN [kang.jaeeun@joongang.co.kr]