BTS’s agency HYBE has announced that it has canceled its takeover bid for SM Entertainment, ending weeks of corporate smears that have dominated headlines in South Korea.
HYBE said Sunday it has made the decision “after noticing that the market is showing signs of overheating due to competition from both Kakao and Kakao Entertainment.”
“The company has also considered the potential negative impact on HYBE’s shareholder value,” the company said in a statement to CNN.
Last week, the tech giant Kakao and its entertainment division said that doubled in their quest to take control of SM, the iconic K-pop music agency. They were aiming to buy up to 35% of the music label just days after a previous share sale agreement between the two parties was blocked by a South Korean court.
Kakao offered SM shareholders 150,000 won ($115) per share, much more than HYBE’s previous offer of 120,000 won ($92) per share, which attracted only moderate investor interest.
There have been concerns in the industry that HYBE’s attempt to gain a larger stake in SM, which is known for representing popular acts such as NCT 127, EXO, BoA and Girls’ Generation, is unfairly dominating the K-pop world. HYBE Chairman Bang Shi Hyuk denied these accusations in an exclusive interview with CNN’s Richard Quest.
HYBE currently owns 15.8% of SM. This ownership comes from shares obtained through a tender offer and his previous holding of 14.8% acquired last month directly from Lee Soo-man, the founder of SM and the legendary music producer who is widely referred to in South Korea as the “Godfather of K”. -“. pop.”
HYBE said in a statement Sunday that SM’s acquisition price “has exceeded its fair acquisition price range as competition from both Kakao and Kakao Entertainment has intensified.”
The two companies have agreed to “collaborate” on issues related to their platforms in the future.
SM Entertainment said in a statement that they “welcome” HYBE’s decision to put their takeover bid on hold.
Kakao and its entertainment division will continue their existing tender offer to SM shareholders, which will end on March 26, they told CNN.