[Correction] Kakao Games Sells Management Rights to Private Equity Fund... LY Corporation and Kakao Participate as Key LPs, Targeting the Global Market

LAAA Investment Becomes Largest Shareholder, LY Corporation and Kakao Co-Invest to Maintain Strategic Partnership

[Notice] This article was originally published on March 25, but is being republished to reflect the corrected disclosure of the report on material facts submitted by Kakao Games on April 2, revising key details regarding the governance restructuring, such as the actual general partner (GP) of the acquiring entity and the co-investment (LP) by LY Corporation and Kakao.

Kakao Games is completely restructuring its governance by welcoming a private equity fund (PEF) as its new owner. This decision demonstrates Kakao Games' strong will to leap beyond the limits of the domestic market and become a global game and content company.

'LAAA', Led by Petrico Partners, Secures Management Rights with 300 Billion Won Investment... LY Corporation and Kakao Participate as LPs

Through a corrected disclosure on April 2, Kakao Games clearly announced its plans for large-scale capital attraction and governance restructuring. The special purpose company 'LAAA (L-Triple-A) Investment' will acquire all of the approximately 240 billion won worth of new shares and 60 billion won worth of convertible bonds (CB) issued by Kakao Games.

The core of this transaction is not a simple fundraising, but a 'change of ownership'. Along with the acquisition of new shares, LAAA Investment also signed a contract to purchase 18,107,732 existing shares from the current largest shareholder, Kakao. Upon completion of the payment on May 29, 2026, LAAA Investment will become the largest shareholder of Kakao Games.

Of particular note is the actual governance structure of the new largest shareholder. The corrected disclosure clearly stated that the largest contributor to LAAA Investment is the 'Petrico No. 6 Private Equity Joint Venture Company'. Petrico Partners LLC, a private equity fund management company, will independently manage the fund as the general partner (GP).

Japan's LY Corporation, which the market initially expected to take direct control of management rights, and the existing largest shareholder, Kakao Corp., will co-invest in the fund on a major scale as limited partners (LPs).

Thoroughly Calculated Low Valuation... Dilution of Existing Shareholder Value Inevitable

The acquiring side secured management rights at an attractive price by utilizing the period of stock price decline. The issue price for the new shares from the paid-in capital increase is 13,747 won, and the CB conversion price is 13,812 won, which exactly reflects the volume-weighted average stock price level over the past month.

The new shares issued through the capital increase (17,458,354 shares) account for about 19.4% of the total number of issued shares prior to the capital increase, and if all CBs are converted into stock, an additional 4,344,048 shares will enter the market. This will result in the dilution of existing shareholders' equity value, but the company explained that this is an essential process the company must go through for growth investment and the strengthening of financial soundness.

Investing 300 Billion Won to Extend the Global Runway

Kakao Games will intensively invest the approximately 300 billion won in resources secured this time to strengthen its competitiveness in the global market. In particular, the 240 billion won in operating funds raised through the issuance of new shares is planned to be executed sequentially, divided into 80 billion won in 2027 and 160 billion won from 2028 onwards.

The company officially announced its future business operation direction through the corrected disclosure. Even after completing the management rights transaction, the company plans to maintain the basic direction of its game development and publishing business, while operating the company with a focus on improving financial stability and strengthening its global business competitiveness.

With Petrico Partners LLC independently managing the fund, the market's attention is focused on how LY Corporation and Kakao, joining as key contributors, will create global platform synergies as strategic partners.