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K-Pop agency duel continues as Korean regulators raid SM Entertainment offices

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The struggle for K-Pop corporate dominance has become a never-ending drama.

South Korea’s financial regulator is investigating the deal following a bitter takeover battle between BTS backer Hybe Corp. and tech giant Kakao for SM Entertainment Ultimately led to Kakao’s victory.

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South Korea’s Financial Supervisory Service raided the offices of SM Entertainment on Tuesday, Yonhap News Agency reported. Investigators are looking for evidence of stock price manipulation during a February-March skirmish between the two camps.

Earlier this month, the FSS raided Kakao and its subsidiary Kakao Entertainment following Hybe’s petition.

Hybe acquires 14.8% stake in SM Entertainment, the agency behind K-pop artists including EXO, Aespa and NCT, from its founder Lee Soo Man. But SM Entertainment’s management objected to the rival’s move and sought Kakao’s support.

As a defensive measure, SM Entertainment announced that it will issue stock and convertible shares to Kakao.That is blocked by court injunction. Hybe seeks to purchase additional SM Entertainment shares on the open market through a public offering to existing shareholders. but, Enriched by funding from Saudi ArabiaKakao hits back with higher bid for 40% of company – move become a knockout.

Despite the ongoing war of attrition, there are signs that some kind of new normal is emerging.

Hybe’s “fan life platform” Weverse announced on Monday that 12 individual and group artists from SM Entertainment will join the platform and open their respective official communities by September 2023, moving them from SM Entertainment’s existing fan community platform Kwangya. Club transfer.

The partnership with Weverse was part of a settlement between SM Entertainment, Kakao and Hybe when Hybe agreed to an offer of higher value stock from Kakao. The division is in part responsible for BTS’ coverage, which covers fan chat and multimedia content, a commerce platform where fans can purchase albums and official artist-related merchandise. Weverse is now available in 245 countries and has about 65 million subscribers, Hybe said.

Hybe shares have also seen a big jump since the truce. Its shares rose 37% to 251,000 won per share last month. Korean financial media reported that institutional investors and overseas investors have been net buyers of the stock.

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