We advised Kakao Pay in reaching a settlement with Siebert Financial 

On December 19, 2023, Siebert Financial Corp. and Kakaopay Corporation (Kakao Pay) entered into a mutual agreement to terminate the second tranche stock purchase agreement (SPA) that they entered into on April 27, 2023. The parties have terminated the SPA after reaching a compromise regarding their disagreement over, among other things, the occurrence of a “Purchaser Material Adverse Effect” in the SPA and the ability of the closing conditions in the SPA to be satisfied.

Under the terms of the parties’ agreement, Kakao Pay will continue to own the 8,075,607 shares of Siebert common stock that it purchased from Siebert in May 2023 and retain its right under a separate stockholders’ agreement to designate one director to Siebert’s board of directors, subject to certain conditions. Other contractual consent rights that Kakao Pay would have otherwise retained once the parties failed to consummate the stock issuance contemplated by the SPA have been modified to provide Siebert’s management with additional flexibility to grow the company. Siebert will make a payment to Kakao Pay as a settlement fee, payable in installments beginning on March 29, 2024. Neither party will pay any other fees, or have any other liabilities, to the other party related to the SPA.

Siebert is a diversified financial services company and a member of the NYSE since 1967. Through its subsidiaries Muriel Siebert & Co., Inc., Siebert AdvisorNXT, Inc., Park Wilshire Companies, Inc., RISE Financial Services, LLC, Siebert Technologies, LLC and StockCross Digital Solutions, Ltd, Siebert provides a full range of brokerage and financial advisory services including securities brokerage, investment advisory and insurance offerings, securities lending and corporate stock plan administration solutions.

Kakao Pay is a lifestyle financial platform leading the transition into a wallet-less society. Since launching the first mobile payment service in Korea in 2014, Kakao Pay has grown into the industry’s leading innovator, offering a diverse lineup of innovative financial services including online/offline payment, money transfer, membership, bill payment and authentication. Starting with its investment service in November 2018, Kakao Pay has expanded its services from credit rating to loans and insurance providing easy access to financial services for everyone.

The Davis Polk litigation team included partner James I. McClammy, counsel Matthew Cormack and associates Eric M. Kim, Esther C. Townes, Adam M. Greene, Jonah J. Stotsky, Elaine M. Andersen and Rana Leila Sahar. Partner Zachary J. Zweihorn and associate Mary Jane Dumankaya provided FINRA advice. Partner Paul D. Marquardt and associate Kendall Howell provided CFIUS advice. The corporate team included partners Miranda So and Cheryl Chan, and counsel Samuel Kang and registered foreign lawyer Yong Lee. Members of the Davis Polk team are based in the New York, Washington DC and Hong Kong offices.