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SEOUL, March 24 (Reuters) – South Korean music label HYBE (352820.KS)The manager of boy band BTS said on Friday it aims to sell its entire 15.8 percent stake in K-pop pioneer SM Entertainment (041510.KQ) Accepted bidder Kakao’s offer for 564 billion won ($437 million).
The decision marks the official end of the takeover battle between HYBE and social media giant Kakao Corp (035720.KS) SM began to clash with SM in February after SM’s management alienated its founder Lee Soo-man over governance issues.
HYBE battles Kakao for SM front for weeks drop It bid earlier this month. But until Friday, it was uncertain whether HYBE, currently SM’s largest shareholder, would sell its stake.
Kakao, which has big expansion plans in the entertainment industry, made an offer to SM earlier this month for up to 35 percent of SM for 150,000 won per share, after HYBE’s 120,000 won offer failed to win enough investor support.
The planned stake sale will net HYBE about $87 million, a quick 25 percent return on an investment made a month ago primarily through the purchase of a stake from 70-year-old SM founder Lee Soo-man, considered the “godfather”” K-pop industry.
Kakao’s proposal has the support of the current SM management team, led by Lee’s nephew.
HYBE chairman Bang Si-hyuk said last week that he was “personally satisfied” with the new partnership Cooperation with Kakao in the fan platform business, despite losing the battle to SM.
Bang added that HYBE plans to make a lot of acquisitions and investments this year as the K-pop giant looks to boost its presence in the US.
SM shares were up 1.77 percent by 11:18 a.m. (0213 GMT), while the smaller Kosdaq was up 1.13 percent. HYBE shares rose 0.85 percent, while the benchmark KOSPI market fell 0.53 percent.
SM has popular K-pop groups like Girls’ Generation, HOT, EXO, Red Velvet, Super Junior, SHINee, NCT Dream, and Aespa.
($1 = 1,290.2100 won)
Reporting by Hyunsu Yim; Writing by Miyoung Kim; Editing by Jacqueline Wong and Jamie Freed
Our standards: Thomson Reuters Trust Principles.
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