BTS HYBE Agency Ends Battle To Buy K-pop Pioneer SM Entertainment Soompi

Hong Kong/Seoul(CNN) BTS’s agency HYBE said it has called off a takeover bid for SM Entertainment, ending weeks of corporate bashing that has dominated headlines in South Korea.

HYBE said on Sunday it made its decision “after observing that the market was showing signs of overheating due to competition with Kakao and Kakao Entertainment.”

“The company also considered the potential negative impact on HYBE’s shareholder value,” she said in a statement to CNN.

Last week, tech giant Kakao and its entertainment unit said they had doubled down on their quest to take control of SM, the iconic K-pop music agency. They have sought to buy up to 35% of the music label, just days after a previous share sale deal between the two parties was blocked by a South Korean court.

Kakao offered SM shareholders 150,000 won ($115) per share, significantly more than HYBE’s previous offer of 120,000 won ($92) per share, which received only moderate interest from investors.

The industry feared that HYBE’s offer to take a bigger stake in SM – which is known for representing hit artists such as NCT 127, EXO, BoA and Girls’ Generation – would unfairly dominate the K-pop world. . HYBE President Bang Si-Hyuk denied the accusations in an exclusive interview with CNN’s Richard Quest.

HYBE currently owns 15.8% of SM. This ownership is derived from shares acquired in its takeover bid and its previous 14.8% stake purchased last month directly from Lee Soo-man, the founder of SM and a legendary music producer widely known in Korea. South “the godfather of popular K-.”

In Sunday’s statement, HYBE said SM’s acquisition price had “exceeded the fair acquisition price range as competition with Kakao and Kakao Entertainment intensified.”

The two companies agreed to “cooperate” on issues related to their platforms going forward, he said.

SM Entertainment said in a statement that it “welcomes” HYBE’s decision to suspend its tender offer.

Kakao and its entertainment unit will continue with their existing tender offer to SM shareholders, which will end on March 26, they told CNN.

CNN’s Michelle Toh contributed reporting

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