Naver Corp held off on an initial public offering (IPO) for its Line Corp unit in the belief that the messaging app operator could command a better valuation by further building its revenue and profit, Naver’s chief financial officer told reporters yesterday.
South Korea-based Naver said on Monday that it does not plan an IPO for Line this year, dashing market expectations for a deal that one banking source has said could value Japan-based Line at US$10 billion to US$20 billion.
Naver chief financial officer Hwang In-joon said that while Naver is open to strategic alliances or investments for Line, there are no such discussions ongoing and he does not consider such tie-ups to be crucial for Line for now.
Photo: Reuters
“Market conditions on their own don’t look bad, but the real question is whether now is the right time for us to step forward,” he said. “And we ultimately decided that it’s better to further build up the business than what it is this year.”
Preparations for a Line IPO continue, he said.
A banking source told reporters in July that Line would likely list in November. A Line IPO would be the first by a major chat app operator.
Naver said on Monday that the operator of the Line app is still considering whether to seek a listing, either in Japan, the US, or both, but gave no details on possible timing.
The decision to hold back on an IPO followed the record-breaking US$25 billion listing by Chinese e-commerce giant Alibaba Group Holding Ltd (阿里巴巴).
A successful Alibaba IPO had been expected to help smooth the way for an offering by Line.
The decision also led to speculation that Naver may be seeking a strategic investment from a company, Alibaba in particular, for Line to further bolster the company’s value before an offering.
Alibaba declined to comment yesterday.
Hwang said he did not believe that Alibaba’s massive listing had sapped investor demand for tech shares.
“Alibaba’s IPO has provided momentum for the valuation of IT stocks right now,” he said in a telephone interview.
Line is expected eventually to raise funds to boost growth outside Japan and compete with rivals such as WhatsApp and Tencent Holdings Ltd’s (騰訊) WeChat, the dominant chat app in China.
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