SEOUL, March 24 — South Korean music label HYBE 352820.KS, manager of boy band BTS, said today it aimed to sell its entire 15.8 per cent stake in K-pop pioneer SM Entertainment for 564 billion won (US$437 million, or RM1.93 billion) by accepting a tender offer from bidder Kakao.
The decision marked a formal end to a takeover battle between HYBE and social media giant Kakao Corp over SM that began in February after SM’s management became estranged from its founder Lee Soo-man over governance issues.
For weeks, HYBE battled against Kakao to acquire SM before dropping its bid earlier this month. But it remained uncertain until today whether HYBE, currently SM’s biggest shareholder, would dispose of its stake.
Kakao, which has big expansion plans in the entertainment industry, launched a tender offer for SM earlier this month to acquire up to 35 per cent at 150,000 won per share after HYBE’s 120,000 won offer failed to win enough investor support.
The planned stake sale would allow HYBE to pocket a gain of around US$87 million, a 25 per cent quick return from an investment made just a month ago mainly by purchasing a stake from SM founder Lee Soo-man, 70, who is considered the “godfather” of the K-pop industry.
Kakao’s offer was backed by the current SM management team, led by Lee’s nephew.
HYBE chairman Bang Si-hyuk said last week that he was “personally satisfied” with a new partnership with Kakao on fan platform businesses despite losing the battle over SM.
HYBE plans a substantial number of acquisitions and investments this year as the K-pop giant looks to boost its US presence, Bang added.
SM shares were up 1.77 per cent as of 11:18 am (0213 GMT) while the smaller Kosdaq Index saw a 1.13 per cent rise. HYBE shares were up 0.85 per cent, compared with a 0.53 per cent drop in the benchmark KOSPI market.
SM is home to popular K-pop groups such as Girls’ Generation, HOT, EXO, Red Velvet, Super Junior, SHINee, NCT Dream and Aespa. — Reuters
