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South Korean entertainment company HYBE will acquire a controlling stake in rival SM Entertainment, becoming its largest shareholder with a 14.8% stake.
in regulatory filings freed February 10, move Announced that 3.5 million shares have been purchased SM Entertainment Founder and former CEO Lee Soo-man at approximately $78.46 per share, for a total value of $334.3 million.
Lee, often referred to as the “Godfather of K-pop,” 18.5% stake Works at SM Entertainment and has listed its shares for sale in 2021 to increase the company’s enterprise value. However, following the sale, the company terminated its production contract with Lee’s production company, Like Planning, after investors claimed that the relationship between SM and Like Planning was affecting shareholder value.
The transaction between HYBE and Lee will be finalize On March 6, HYBE also offered to buy an additional 25% of SM from other investors. In response, SM top management, including the co-CEO, released a statement Oppose any “hostile takeover” by any outside company, including HYBE.
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a survey It is said It was found that 85% of SM employees opposed the HYBE takeover.
One employee even went viral for being distraught by the reshuffle, writing in a company review that she had lost motivation and pride in her work at the company.
Despite the mixed reaction, shares of SM rose 16 percent at the open in Seoul following the announcement, while HYBE shares jumped 6 percent. Shares of other competing entertainment companies, such as JYP Entertainment and YG Entertainment, also rose.
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in a Joint StatementHYBE Chairman Bang Si-hyuk and Lee say they “agreed on a common vision for the future” [the] Korean pop music industry. “
The statement also stated that HYBE agrees with Lee’s initiatives for the future of the industry, including participation in the metaverse, multi-label system and sustainable vision activities.
Considered one of the four major K-pop entertainment giants, SM Entertainment has cultivated many influential artists since its establishment in 1995, including python, Girls’ Generation, super teen and more.Currently, the company’s roster also includes Esper, NCT 127, SHINee and red velvet,etc.
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HYBE was originally established in 2005, formerly known as Big Hit Entertainment, due to BTS‘ Global success. The company, through its subsidiaries, is also home to other K-pop groups such as Tomorrow X Together, ENHYPEN, seventeen, Seraphim and new jeans.
After HYBE acquired SM recent acquisition A member of Quality Control Media Holdings, home to such American hip hop artists as Migos, Lil Yachty, City Girls and Lil Baby.
The acquisition marks Scooter Braun’s first step as sole CEO of HYBE’s US division. Also, the acquisition follows South Korean tech company Kakao’s announcement to acquire a 9.05% stake in SM, which was later halted due to legal action by Lee’s legal counsel.
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