Hybe’s plan to take control of SM Entertainment falls through
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Hybe, the South Korean advertising company, has reportedly dropped its plan to acquire stable management control over its competitor firm, SM Entertainment by purchasing additional shares via a tender offer, according to industry sources.
On February 10, Hybe made a tender offer for shares of SM Entertainment owned by small shareholders. It made a share bid of 120,000 won ($92.60), hoping to acquire up to 25% of SM Entertainment. Apparently, the tender offer expired on March 1.
Industry insiders do not anticipate many shareholders to have accepted the deal, given that SM Entertainment’s stock price increased by over 120,000 won ($92.60) after February 14.
The management company of K-pop sensation BTS believes that the sudden price increase is the outcome of that stock price tampering conducted to get involved with Hybe’s tender offer.
Hybe cited figures showing a suspicious purchase of 2.9% (683,398 shares) of the issued shares of SM Entertainment on February 16. The same day, the price of the SM Entertainment stock increased to an all-time peak of 133,600 won ($103).
Reportedly, the financial regulator is investigating the case after receiving a petition from the business on February 28 asking for an inquiry.
To make things worse, SM Entertainment stated on Monday that Hybe should not try to negotiate a block agreement with the agency’s shareholders following the unsuccessful tender offer as it would be against the law.
On February 10, Hybe agreed to purchase SM Entertainment founder Lee Soo-man’s 14.8% stake for 422.8 billion won ($325980.74).
As per reports, the agreement was regarded as a retaliatory move by Lee against Tak Young-jun and Lee Sung-soo, the two present co-CEOs. The two parties have been at odds over who will be heading SM Entertainment.
Previously, this conflict included the IT company Kakao, which entered a partnership agreement with the co-CEOs of SM Entertainment to purchase a 9.05% stake in the K-pop agency.
The worst is yet to come for Hybe, though, as last week the court granted SM Entertainment founder Lee’s plea to reject Kakao’s bid.
Source credit: http://www.koreaherald.com/view.php?ud=20230306000615&np=1&mp=1