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South Korea’s HYBE said on Friday (March 24) that it will sell its stake in SM Entertainment, officially ending a bidding war between HYBE and South Korean tech firm Kakao for control of a K-pop agency popular in the genre. and the key to overseas expansion in recent years.
HYBE, the hometown of superstar boy group BTSsaid in a filing that it will sell its roughly 15 percent stake in SM to Kakao for nearly 564 billion won ($435 million), which it acquired earlier this month. Announce A tender offer to acquire up to 35% of the issued shares of SM Entertainment.
Owned by Kakao Entertainment monster xK-pop record label Starship Entertainment, as well as South Korean music streaming app Melon, North American-based webcomic company Tapas Entertainment and several media production companies. It is a subsidiary of technology conglomerate Kakao Corp.
move Acquired a majority stake in SM From the founder of SM in February Li Xiuman, who was recently kicked out of the company after shareholders demanded changes to SM’s structure. For more than a decade, Lee has exercised top-down control of the company he founded in 1995, and shareholders have questioned the multimillion-dollar producer fees he receives each year.
Lee sold his stake to HYBE in retaliation for SM’s move to issue shares to Kakao, eventually prompting HYBE to try to acquire a majority stake in SM through a tender offer.Seashells ease in mid-March Because, it said, a higher bid than Kakao’s could “have a negative impact on our shareholders”.
Just days after calling off the company’s bid for control of SM, HYBE founder/chairman Bang Shi Hyuk reiterated his desire to expand beyond South Korea In order to eventually compete globally with the big three labels – Universal Music Group, Sony Music Entertainment and Warner Music Group – the label said there had to be a “sense of urgency”.
Bang also expressed hope for external support for K-pop companies to compete with larger players, including possibly from the South Korean government, which could help elevate Korean companies in other industries to global players. HYBE has made strides in this regard with two US acquisitions – scooter brownIthaca Holdings and QC Media Holdings, the parent company of hip-hop record label Quality Control Music, said Bang said it was only “the beginning” of their quest for global dominance.
SM and HYBE have dominated the Korean and global pop charts in recent years. Together, they account for nearly half of all album sales in South Korea in 2022, according to South Korean chart company Circle Chart.
HYBE’s planned stock sale could net the company $87 million, the equivalent of a 25% return on Lee’s stock purchase a month earlier, Reuters reported earlier Friday.
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