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HYBE Bows Out of Acquisition Battle, To Compromise with KAKAO over SM Entertainment’s Management Rights

The Tea is Hot! The News is Cool. And the DRAMA is Oh So Juicy!!!

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The battle over SM Entertainment is finally over.

The battle deemed a “war of money” concluded on the 10th when KAKAO compromised with HYBE. Though details are yet to be disclosed, it’s been rumored that both companies agreed to a structure that will not monopolize SM Entertainment. 

HYBE Chairman Bang Si-Hyuk suspended the acquisition process of SM Entertainment. Today, HYBE released a press release and shared that the decision to suspend the acquisition was made considering how the situation could negatively affect HYBE’s shareholder value. They acknowledged that the market was overheating due to the intense competition with KAKAO and SM Entertainment. 

HYBE acquired the shares from SM Entertainment’s founder and former producer, Lee Soo-Man, conducting a public purchase by setting an appropriate acquisition price range. However, the chairman judged, “In the current situation where the competition is intensifying due to the additional public purchase of Kakao and Kakao Entertainment, and the stock market is overheating, the price that should be presented for the acquisition of SM has exceeded the appropriate range. We decided to suspend the acquisition process, considering that pushing for the acquisition of SM even while conducting an open purchase against them could negatively affect HYBE’s shareholder value and further encourage overheating in the market.” 

Chairman Bang explained that he had discussed the matter with KAKAO on SM Management rights since the 10th, and the two companies have made a grand agreement. HYBE will suspend the process of acquiring SM management rights and agree on ways the two companies will collaborate on platforms. 

HYBE’s press release stated, “We decided to suspend the SM acquisition process in consideration of internal and external factors. We are grateful to all those who supported and supported us in the acquisition of SM.”

KAKAO and HYBE’s war for money rose to 1 trillion KRW. When KAKAO challenged HYBE’s attempt to buy a 25% stake in SM Entertainment, KAKAO countered and announced they would buy 35% of SM shares. SM Entertainment’s stocks soared to nearly 160,000 KRW after KAKAO announced its plan to acquire public shares. However, SM Entertainment’s stocks fell 4.58% on the 10th. 

As a result of the grand compromise, HYBE, and KAKAO will not vote at the “28th SM regular shareholders’ meeting” scheduled for the 31st.

Source: Chosun NewsNewsis News

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