Capital Calls-BTS-Bieber $1 bln deal makes a Grande statement

JYP Entertainment

07/04/2021 09:41

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
    HONG KONG, April 7 (Reuters Breakingviews) - Concise
insights on global finance in the Covid-19 era.
 
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    MERGER OF FEVERS. Friday’s $1 billion acquisition
 urn:newsml:reuters.com:*:nL4N2LV13C of U.S. musical talent manager Ithaca won’t just
unite two of the industry’s biggest phenoms this century under
the same roof – Justin Bieber and K-Pop’s BTS. It also will test
the limits of how much investors swoon over the fortunes of
acquirer HYBE  352820.KS .
    Shares in the company formerly known as Big Hit
Entertainment are now double last October’s much-hyped initial
public offering  urn:newsml:reuters.com:*:nL4N2B30BX. And they have jumped some 15%
since the merger https://www.prnewswire.com/news-releases/hybe-and-ithaca-holdings-join-forces-to-lead-the-global-music-industry-innovation-301261320.html
 was unveiled, adding roughly the value of the deal itself to
HYBE’s market worth, which now stands at $8.8 billion.
    HYBE is growing fast – earnings may more than double this
year, per Refinitiv. And the merger will diversify its portfolio
with artists from Ariana Grande to Demi Lovato.
    But the stock now trades at 53 times estimated 2021 earnings
– a significant premium to competitors including YG
Entertainment  122870.KQ , JYP Entertainment  035900.KQ  and SM
Entertainment  041510.KQ . That’s enough to start rattling some
eardrums. (By Sharon Lam)

    On Twitter http://twitter.com/breakingviews
    
    Earlier in Capital Calls:
    
    Jean Raby exit leaves Natixis ruing M&A dreams  urn:newsml:reuters.com:*:nL4N2M025J
    Rent-a-bling deal shines up Signet  urn:newsml:reuters.com:*:nL1N2LZ1Z5
    Dolce & Gabbana not such a sweet morsel  urn:newsml:reuters.com:*:nL4N2LZ35U 
    Michael Eisner’s comeback  urn:newsml:reuters.com:*:nL1N2LZ1CT
    SoftBank’s latest robotic bet looks logical  urn:newsml:reuters.com:*:nL4N2LZ29V 
     

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