[ad_1]
HYBE, the company behind the K-pop group BTS and X together tomorrowhas acquired a major stake in rival K-pop company SM Entertainment, a stronghold of artists including NCT 127Super M and Esper. According to a Regulatory filing HYBE acquired a stake worth 422.8 billion won ($334.3 million) in the company, making it the company’s largest shareholder, the announcement was made in Seoul on Friday (Feb. 10).
HYBE buys 3.5 million shares from SM Entertainment founder Li XiumanSM Entertainment’s largest shareholder paid 120,000 won ($94.88) per share, a 21.8 percent premium to the previous day’s closing price. Shares of SM Entertainment rose nearly 19 percent to 117,000 won on Friday morning before falling to 109,600 won by mid-morning.
The deal gives HYBE a 14.8 percent stake in the publicly traded music company, which has a market capitalization of about $1.8 billion. HYBE has a market cap of approximately $6.5 billion.
Mr. Lee, who is currently embroiled in a power struggle with SM Entertainment’s management, owns about 18.5 percent of SM Entertainment’s outstanding shares, according to the company. Investor Relations Website. After the sale to HYBE, he is left with approximately 869,000 shares and a 3.7% stake. According to the filing, Lee has a put option to sell his remaining stake in HYBE one year after the date of purchase or business combination, whichever comes first.
South Korean tech company Kakao, owner of music streaming service Melon, announced Tuesday that it will get Holding a 9.05% stake in SM Entertainment, becoming the company’s second largest shareholder. However, Li objected to Kakao’s investment. According to reportsLee intends to call SM Entertainment and Kakao’s plan, in which SM Entertainment will issue new shares and convertible bonds, an “illegal act in violation of commercial law and the company’s articles of association.”
Kakao’s investment will increase SM Entertainment’s outstanding share count and dilute the stakes of other shareholders.According to reports, on March 6 Kakao Regulatory Documents, Kakao will issue 1.23 million shares and bonds convertible into 1.14 million shares in March 2024. The additional 2.37 million shares would increase the number of shares outstanding from 23.8 million to 26.2 million and reduce HYBE’s stake from 14.8% to 13.5%.
The investment in SM Entertainment is HYBE’s second big deal in as many days.On Wednesday, HYBE America announced that it has Acquired QC Media Holdings, the parent company of Atlanta-based hip-hop record label Quality Control Music.The $300 million deal adds artists, including Migos, Baby, small yacht and city girl Join HYBE’s roster and place quality control roster under the leadership of HYBE’s US CEO scooter brown.
[ad_2]
Source link