K-Pop agency SM Entertainment has revealed its support for a tender offer submitted by South Korean internet giant Kakao, which would see the company hold a 35% stake in SM.
Yesterday (Tuesday) Kakao announced a tender offer to buy up to 35% of the company for 150,000 South Korean won (£96/€108/$114) per share. Kakao already holds a 4.9% share of SM Entertainment.
If successful, the bid would see Kakao become the largest shareholder over BTS label HYBE, which has recently acquired nearly 16% of SM. HYBE also tried to acquire a 25% stake in the company, but this fell through.
As reported by Yonhap News Agency, Kokao said: “Kakao has decided to become the largest shareholder of SM Entertainment in a bid to maintain a stable partnership with the company. Based on the horizontal partnership between the two companies, we will create great synergy to strengthen the global competitiveness and presence of Korean culture.”
SM Entertainment’s said: “Unlike HYBE seeking to take over SM’s board of directors through a hostile merger and acquisition, Kakao is the best horizontal and strategic partner for the successful implementation of the ‘SM 3.0’ vision as it respects SM’s own tradition and identity, and will ensure autonomous and independent management of the company, as well as the continuous and independent activities of SM artists.”
Yonhap News Agency also reported that the move has come after a Seoul court recently ruled against SM Entertainment’s planned issuance of new shares and convertible bonds to Kakao Entertainment, to secure a 9% stake in SM Entertainment.
SM is the agency of K-Pop stars such as NCT 127 and Aespa.