K-pop takeover battle loser HYBE to sell SM Entertainment stake (updated)

SM Entertainment Co

24/03/2023 03:08

(Adds details of stake value, share price moves)
       SEOUL, March 24 (Reuters) - South Korean music label
HYBE  352820.KS , which manages boy band BTS, said on Friday it
would try to sell its entire stake in SM Entertainment
 041510.KQ  after losing a battle for control of the K-pop
pioneer.
        HYBE's 15.78% stake in SM is worth 564 billion won
($437.14 million) based on social media giant Kakao Corp's
 035720.KS  tender offer to acquire up to 35% of the company at
150,000 a share, which closes on Friday.
        That would represent a gain of more than 20% from the
price HYBE paid for its stake, most of which was acquired in
February from SM founder Lee Soo-man, 70, who is considered the
"godfather" of the K-pop industry.
    For weeks, HYBE battled against Kakao to acquire SM before
dropping its bid earlier this month. But cashed-up Kakao's price
was well above HYBE's 120,000 won per share offer that had
gained little traction with shareholders. 
    Kakao's offer was also backed by the current SM management
team, led by Lee's nephew.
    HYBE chairman Bang Si-hyuk said last week that he was
"personally satisfied" with a new partnership with Kakao on fan
platform businesses despite losing the battle over SM.
        HYBE plans a substantial number of acquisitions and
investments this year as the K-pop giant looks to boost its U.S.
presence, Bang added.
        SM shares were up 1.77% as of 11:18 a.m. (0213 GMT)
while  the smaller Kosdaq Index saw a 1.13% rise. HYBE shares
were up 0.85%, compared with a 0.53% drop in the benchmark KOSPI
market.
    SM is home to popular K-pop groups such as Girls'
Generation, H.O.T., EXO, Red Velvet, Super Junior, SHINee, NCT
Dream and Aespa.
($1 = 1,290.2100 won)

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EXPLAINER-How Kakao won a takeover battle against HYBE for K-pop
pioneer SM Entertainment     urn:newsml:reuters.com:*:nL4N35I0ZD
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 (Reporting by Hyunsu Yim; Editing by Jacqueline Wong and Jamie
Freed)
 ((Hyunsu.Yim@thomsonreuters.com;))