South Korea-based entertainment giant HYBE has sold a $50 million stake in rival K-pop company SM Entertainment.
This is according to a regulatory filing released by HYBE on Tuesday (May 28), which indicated that the company has sold 755,522 SM Entertainment’s stock price is 90,531 won per share.
According to the filing, the total transaction value is 68.3 billion Korean Won, converted into approx. US$50 million Calculated at current exchange rate.
The documents stated that the shares were sold through “after-hours block trading” through a “board resolution” before the market opened on Tuesday.
After this transaction, HYBE’s shareholding in SM Entertainment was reduced to 2.21 million shares.
according to Korea JoongAng Ilbo (South Korean media company JoongAng Group and New York Times) HYBE sold shares equivalent to 3.2% of SM Entertainment’s shares, reducing HYBE’s stake in SM to 9.38%.
SM represents K-Pop stars such as SUPER JUNIOR, Girls’ Generation, SHINee, EXO, Red Velvet, KANGTA, BoA, TVXQ!
HYBE originally acquired 14.8% SM founder and former chief producer Lee Soo Man invested in SM for approximately US$335 million.
After HYBE acquisition 14.8% In February last year, the company acquired SM Company shares from its founder and revealed plans to acquire additional SM Company shares. 25.2% Stake in SM Entertainment – This will bring HYBE’s total holdings to 40% – Through a tender offer to SM minority shareholders.
However, HYBE’s acquisition plans failed to materialize and it only managed to acquire one additional company 0.98% Bought a stake in SM Entertainment, raising its ownership to 15.78% (include 14.8% shares acquired in February 2023).
Kakao/Kakao Entertainment subsequently launched a tender offer to SM shareholders at a price per share higher than HYBE’s bid.
Kakao has agreed to the purchase agreement 9.05% SM acquired SM in February through the purchase of bonds and newly issued shares. However, Lee Soo Man successfully blocked the acquisition attempt through an injunction in a Seoul court.
HYBE tried to acquire 40% of SM’s shares, but was strongly resisted by SM’s management. On March 12, HYBE ended its attempt to acquire SM.
The company said in March last year that “after observing market conditions, it has withdrawn from the battle for control of SM Entertainment.”[d] The company has been showing signs of overheating due to competition with Kakao and Kakao Entertainment.
At the end of March 2023, Kakao Corp. officially became SM Entertainment’s largest shareholder after completing its tender offer for shares in SM Entertainment, with its shareholding ratio increasing from the previous 4.9% to 39.87%.
HYBE initially planned to divest all 15.78% of SM’s shares held, but still held 8.81% of SM’s shares.
HYBE subsequently acquired SM in March 2024, increasing its shareholding in SM to approximately 12.6%. 869,948 SM founder and former chief producer Lee Soo Man holds shares in SM Entertainment.
Kakao is listed as the largest shareholder of SM Entertainment on the company’s investor relations website, holding a 39.87% stake in SM (as of September 30, 2023).
The 39.87% shares are allocated to Kakao Company have 20.76% SM Entertainment and Kakao Entertainment Division Kakao Entertainment, have a 19.11% Holds SM shares.
HYBE’s revenue for the first quarter of 2024 was 360.92 billion won ($271.57 million Calculated at the average exchange rate in the first quarter), a 12.1 year-on-year According to the company’s latest financial report released on Thursday (May 2), the company’s stock price fell.global music business
