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Hong Kong/Seoul (CNN) BTS agency HYBE said it has withdrawn its takeover bid for SM Entertainment, ending a corporate smear that has dominated South Korean headlines for weeks.
HYBE said on Sunday that it “made this decision after observing that the market had shown signs of overheating due to competition with Kakao and Kakao Entertainment.”
“The company also considered the potential negative impact on HYBE shareholder value,” it said in a statement to CNN.
Last week, tech giant Kakao and its entertainment arm said they had double down They’re trying to take control of iconic K-pop music agency SM. Their attempt to buy up to 35% of the music label comes just days after a stake sale agreement between the two parties was rejected by a South Korean court.
Kakao’s offer of 150,000 won ($115) per share to SM shareholders is well above HYBE’s previous offer of 120,000 won ($92) per share, which drew only mild interest from investors.
Industry insiders fear that HYBE’s acquisition of a larger stake in SM, known for representing popular artists such as NCT 127, EXO, BoA and Girls’ Generation, will unfairly dominate the K-pop world. HYBE Chairman Bang Si Hyuk-zen rejected the allegations In an interview with CNN’s Richard Quest.
HYBE currently owns 15.8% of SM. The ownership comes from the stake it acquired in its takeover offer, as well as a 14.8 percent purchase last month outright from Lee Soo-man, the founder of SM and a legendary music producer widely known in South Korea as the “K-Godfather” people. Pop music. ”
In a statement on Sunday, HYBE said the purchase price for SM was “beyond a fair purchase price range” as competition with Kakao and Kakao Entertainment intensified.
The two companies have agreed to “collaborate” on matters related to its platform in the future, the company said.
In a statement, SM Entertainment said it “welcomes” HYBE’s decision to suspend its takeover bid.
Kakao and its entertainment arm will continue with the existing offer to SM shareholders, which is due to close on March 26, they told CNN.
CNN’s Michelle Toh contributed reporting
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