Kakao Games (KOSDAQ: 293490), the Korean game publisher behind the MMORPG hit Odin: Valhalla Rising, will convene an extraordinary general meeting (EGM) on June 22 to appoint two new inside directors who are expected to run the company as co-chief executives — the first concrete sign that Japan's LY Corporation is moving its takeover from financing to operational control.
The company disclosed the agenda on June 4, according to filings reported by Yonhap, Maeil Business Newspaper and ChosunBiz. The two director nominees are Kim Tae-hwan, currently chief strategy officer at LINE Games (the gaming arm tied to the acquirer) and a former Nexon Japan and Nexon America executive, and Lee Si-woo, Kakao Games' own chief business officer. Korean gaming press reports the pair are slated to become co-CEOs once installed, replacing outgoing chief executive Han Sang-woo. The EGM will also vote on appointing Lim Tae-seop, a Sungkyunkwan University professor, as an outside director and Seo Seok-ho of Petricore Partners as a non-executive director.
The board reshuffle gives substance to a deal that, on paper, has been set since spring. LY Corporation — the Tokyo-listed operator of the LINE messenger and Yahoo Japan, formed in October 2023 when Z Holdings merged with LINE, Yahoo Japan and affiliated units and was renamed — agreed on March 25 to take control of Kakao Games through a special purpose company called LAAA Investment, per InvestGame and Korea Economic Daily (KED Global).
What the buyer is paying, and getting
The restructuring is worth roughly ₩549 billion ($368 million) in total, of which about ₩300 billion ($201 million) is a fresh capital injection, according to KED Global and InvestGame. The structure combines a ₩240 billion ($161 million) third-party rights issue — 17,458,354 new shares priced at ₩13,747 each — a ₩60 billion ($40 million) zero-coupon convertible bond, and a ₩249 billion ($167 million) secondary purchase of 18,107,732 existing shares from Kakao Corp, InvestGame reported.
On completion, LAAA Investment holds 33.16% of Kakao Games, rising toward roughly 39% on a fully diluted basis if the convertible bond converts and minority private-equity holders exercise tag-along rights, per InvestGame. Kakao Corp — the KakaoTalk operator that has been the publisher's controlling shareholder — falls from 37.55% to 14.57%, slipping to second place. InvestGame and KED Global both date the cash settlement to late May, with new shares listing in June; the source articles for this EGM note the largest-shareholder change is expected to complete this month.
Notably, the rights-issue price of ₩13,747 sits well above where the stock has traded recently: shares changed hands near ₩10,100 in late May against a 52-week range of ₩9,440 to ₩23,600, per market data aggregator stockanalysis.com, which put Kakao Games' market capitalization at roughly ₩864 billion (about $630 million) as of June 4.
Why LINE wants a Korean publisher with falling sales
The timing is awkward on the numbers. Kakao Games posted 2025 revenue of ₩465.0 billion ($339 million), down 25.9% from ₩627.2 billion a year earlier, and swung to an operating loss of ₩39.6 billion ($29 million) from a ₩19.1 billion profit in 2024, according to ZDNet Korea and the company's earnings release. The publisher leans heavily on aging titles — Odin: Valhalla Rising, Uma Musume: Pretty Derby, Eversoul and a PUBG-branded mobile game — with a 2026 pipeline of roughly nine new titles still to prove out.
For LY Corporation, the logic is distribution rather than near-term earnings. InvestGame frames the deal as a way for LY to "address a structural gap in its content pipeline," pairing LINE's roughly 100-million-user Japanese messaging base with an established game publisher. The template is Kakao's own: starting in 2012, KakaoTalk built a game-distribution channel that turned casual titles such as Anipang into national hits and seeded Kakao Games itself — a playbook LY now appears to want to replicate in Japan and Southeast Asia. Kakao Games has described the transaction as a chance to "leap from a domestic market-focused company to a global game and content enterprise," per InvestGame.
Installing Kim Tae-hwan — the LINE Games strategist who reportedly led the acquisition — atop Kakao Games is the clearest signal of integration intent, and Korean coverage flags a possible eventual LINE Games–Kakao Games combination once he is in the chair.
What to watch
The co-CEO structure is not yet final. As of the June 4 disclosure, Kakao Games characterized the leadership change as still under review, to be settled at the June 22 EGM and subsequent board action. That vote is the next confirming data point: it will show whether LY's nominees clear the meeting cleanly and whether the company formalizes a co-CEO arrangement or keeps the structure open. Beyond June 22, the open question is whether LY follows the control change with a deeper tie-up between LINE Games and Kakao Games — and whether new titles in the 2026 slate can reverse a 26% revenue decline that the new managers inherit on day one.
This article is for informational purposes only and does not constitute investment advice. Figures are drawn from company disclosures and cited news reports as of June 4, 2026; currency conversions use approximate prevailing rates and sourced deal figures.
