Kakao ups the ante in battle to take over K-pop agency SM (updated)

SM Entertainment Co

07/03/2023 24:30

(Adds statement from Kakao, details)
       SEOUL, March 7 (Reuters) - Kakao Corp  035720.KS  and
its subsidiary Kakao Entertainment said on Tuesday they are
tendering an offer to purchase up to 35% of K-pop agency SM
Entertainment  041510.KQ , the latest in a battle with
BTS-manager HYBE to take over SM.
    Kakao Corp and Kakao Entertainment are offering 150,000 won
per SM share, seeking to strengthen their strategic partnership
with SM, the companies said in a regulatory filing.
    "With the direction of the three companies's growth facing a
threat, Kakao decided it is inevitable to secure the largest
shareholder positon to protect the partnership with SM
Entertainment," Kakao said in a statement. 
        Kakao's announcement comes after a court decision on
Monday blocked the company from purchasing a 9.05% stake in SM
in a deal announced last month.
        HYBE, the biggest K-pop label which manages boyband BTS,
purchased a 14.8% stake in SM from founder Lee Soo-man last
month and acquired a further 0.98% in SM through a tender offer 
despite initially seeking a further 25% stake at 120,000 won per
share. 
    SM shares have traded above HYBE's tender offer price for
weeks as the battle to take over the K-pop agency drew the
attention of investors. 
        In January, Kakao Entertainment secured a 
    1.2 trillion won ($966.27 million) investment
     from leading sovereign wealth funds, making it the biggest
overseas financing in a South Korean content company.
  

 (Reporting by Hyunsu Yim
Editing by Chris Reese and Lincoln Feast.)
 ((Hyunsu.Yim@thomsonreuters.com;))