Kakao reaches 40% stake in K-pop agency SM, HYBE keeps 8.8%

March 28, 2023 06:11 PM AEDT | By Reuters
Follow us on Google News:
Image source: Reuters

By Hyunsu Yim

SEOUL (Reuters) - South Korean social media giant Kakao has reached a 40% stake in K-pop agency SM Entertainment, the target said on Tuesday, in a deal that left former bidder HYBE stuck with more than half of its stake in SM.

HYBE, the manager of hit boy band BTS, had hoped to sell its entire 15.8% stake into a tender offer from Kakao Corp and affiliate Kakao Entertainment after losing a battle for control of the pioneering K-pop agency.

But Kakao's tender offer for a 35% stake at 150,000 won per share attracted acceptances for more than double the targeted stake, forcing it to scale back allotments in proportion.

HYBE said it was left with a 8.81% stake in SM, which closed at 94,300 won on Tuesday afternoon, leading to a paper loss of about 4.2 billion won ($3.23 million), according to Reuters' calculation.

It had bought its stake for 120,000 won per share, mostly from SM founder Lee Soo-man, who is considered the "godfather" of the K-pop industry.

If HYBE had been able to sell its entire stake into Kakao's offer, it stood to pocket a gain of around $87 million, a 25% quick return from an investment made just a month ago.

HYBE plans a substantial number of acquisitions and investments this year as the K-pop giant looks to boost its U.S. presence, its chairman Bang Si-hyuk said this month.

SM is home to popular K-pop groups such as Girls' Generation, H.O.T., EXO, Red Velvet, Super Junior, SHINee, NCT Dream and Aespa.

($1 = 1,298.9400 won)

(Reporting by Hyunsu Yim and Joyce Lee; Editing by Muralikumar Anantharaman and Jamie Freed)


The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK