A fierce debate is brewing in Seoul’s investment community over the pricing of a landmark share swap between Naver Corp., South Korea’s internet platform giant, and Dunamu Inc., the operator of the world’s fourth-largest crypto exchange, Upbit.
The deal, set to fold Dunamu into Naver’s financial arm, Naver Financial Corp., values Dunamu at about 14 trillion won ($10 billion), roughly three times the 4.7 trillion won value assigned to Naver Financial, according to people familiar with the negotiations.
The exchange ratio – one Dunamu share for about 2.4 newly issued Naver Financial shares – is expected to be confirmed to investors and shareholders at their respective shareholders’ meetings in the coming weeks.
The steep disparity in valuation has triggered unease among shareholders, with some poised to gain significantly more than others.
“The battlefield has opened,” said a Seoul-based investment banker. “The final exchange ratio will be a flashpoint for discontent.”
Last week, sources said Naver Financial is in advanced talks with Dunamu for a stock-for-stock merger deal, in which the Upbit operator will become the Naver fintech arm’s wholly owned subsidiary.
Naver is the largest stakeholder of Naver Financial, holding about 75%, with the remainder owned by Mirae Asset Financial Group companies, including Mirae Asset Securities Co.
Dunamu’s major shareholders include Dunamu co-founder and Chairman Song Chi-hyung, with a 25.5% stake; Dunamu Vice Chairman Kim Hyoung-nyon, 13.1%; Kakao Investment Co., 10.6%; Woori Technology Investment Co., 7.2%; and Hanwha Investment & Securities Co., 5.9%.
SHARES RISE
Under the current terms, Song Chi-hyung, Dunamu’s chair, would emerge as the largest single shareholder of Naver Financial with a 19% stake once the transaction is complete.
Naver’s holdings of Naver Financial would fall to the high-teens from about 70%, sharply diluting its control.
As the deal requires approval at the two firms’ respective extraordinary shareholders’ meetings, at least two-thirds of those present at the meetings must back the proposal, a threshold that could prove challenging given the brewing disquiet, analysts said.
Still, the stock market has cheered the prospect of a tie-up between Korea’s dominant internet platform and its most prominent crypto exchange.
Naver’s shares closed up 7% on Monday at 274,500 won, marking their third consecutive session of gains since news of the deal first surfaced late last week.
Dunamu’s shares, listed on the over-the-counter (OTC) market, spiked 17.4%, hitting a year-to-date high of 405,000 won.
The tie-up is forecast to expedite their joint work on a Korean currency-based stablecoin, a project gaining momentum alongside the government’s push for legislation supporting local-currency stablecoins, a key campaign pledge of President Lee Jae Myung.
Under one roof, Dunamu, a leader in blockchain technology, is expected to issue crypto tokens, which would circulate on Naver Pay, Naver’s payment app.
Paired with Naver’s strength in e-commerce, the initiative could quickly establish a robust won-based stablecoin system, analysts said.
By Jun-Ho Cha
chacha@hankyung.com
In-Soo Nam edited this article.
