Hybe’s plan to take control of SM Entertainment falls through
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