K-pop giant HYBE drops bid for SM Entertainment, ending takeover battle (updated)

SM Entertainment Co

12/03/2023 22:00

(Repeats Sunday story with no changes to text)
    By Hyunsu Yim and Ju-min Park
       SEOUL, March 12 (Reuters) - HYBE Co Ltd  352820.KS , the
agency representing top-selling South Korean boy band BTS,
dropped its plan to take control of K-pop pioneer SM
Entertainment Co Ltd  041510.KQ , the company said on Sunday.
    HYBE's withdrawal put an end to a weeks-long takeover battle
with social media giant Kakao Corp  035720.KS , and will allow
Kakao to expand its entertainment business further.
    HYBE said its decision to halt the takeover bid came after
the price to acquire SM exceeded a fair range as the competition
intensified.
    Kakao last week launched a 1.25 trillion won ($946.80
million) tender bid for up to 35% of SM Entertainment at 150,000
won per share, well above the 120,000 won per share offer from
HYBE for a 25% stake that gained little traction with
shareholders.
        On Friday, shares in SM Entertainment closed at 147,800
won.
    HYBE said after talks with Kakao, the two companies agreed
to cooperate on matters related to their platforms.
    Lee Jong-im, a Seoul-based culture critic, said the takeover
of SM was the latest of a series of efforts by Kakao to expand
its content and entertainment arm in recent years.
        In 2021, Kakao Corp acquired multiple content companies,
including video game developer NFLY STUDIO. 
    Kakao Entertainment, a subsidiary of Kakao, also invested 12
billion won in Metaverse Entertainment, which specialises in
virtual idol groups.
    Kakao and SM Entertainment said they welcomed HYBE's
decision to drop its bid.
    "Kakao and Kakao Entertainment will continue its tender
offer bid until the 26th to secure a further stake and work on
the details of business cooperation between HYBE and SM," Kakao
said in a statement.   
($1 = 1,320.2400 won)

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pioneer SM Entertainment     urn:newsml:reuters.com:*:nL4N35I0ZD
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 (Reporting by Ju-min Park and Hyunsu Yim; Editing by William
Mallard and Jamie Freed)
 ((ju-min.park@thomsonreuters.com; Reuters Messaging:
ju-min.park.thomsonreuters.com@reuters.net))