HYBE, the South Korean leisure large behind BTS, has struck a deal to accumulate a controlling stake in rival Ok-pop label SM Entertainment.
In the regulatory submitting posted by HYBE earlier as we speak (February 10), the leisure firm introduced that it had bought 3.5million shares from SM Entertainment founder and former chief producer Lee Soo-man at ₩120,000 (roughly £78.46) per share. HYBE is about to accumulate a 14.8 per cent stake in SM and change into its largest shareholder.
Founded in 1995, SM Entertainment has been a key architect of the worldwide Ok-pop phenomenon, having developed artists from the trade’s first technology and housed many influential acts together with H.O.T., Girls’ Generation, BoA, Super Junior and extra. Acts signed to its roster as we speak additionally embody aespa, NCT, SHINee and Red Velvet, amongst others.
First established in 2005 as Big Hit Entertainment, HYBE is a report label and expertise company that turned dominant because of the worldwide success of BTS. Through its subsidiaries – that embody Pledis Entertainment, Source Music, ADOR and extra – the company can also be residence to Ok-pop acts Tomorrow X Together, ENHYPEN, SEVENTEEN, LE SSERAFIM, NewJeans and extra.
With an 18.5 per cent stake in SM, Lee – who is usually described because the ‘godfather of K-pop’ – is the firm’s single largest stakeholder. He put up his inventory on the market in 2021 in an effort to extend SM Entertainment’s company worth, hoping to maximise the sale worth and retain his title as then-chief producer for SM following the sale of his shares, in accordance with a report by Korean Economic Daily on the time.
In 2022, slightly over a 12 months after Lee had put his SM shares up on the market, the label introduced it could terminate its manufacturing contract along with his manufacturing firm Like Planning, after traders claimed that ties between SM and Like Planning have been “damaging shareholder value”. Last Friday (February 3), SM’s co-CEOs Lee Sung-soo and Tak Young-jun – the previous being Lee Soo-man’s nephew – mentioned that SM’s contract with its personal founder had been terminated, an announcement which reportedly divided workers.
According to The Korea Times, the deal between HYBE and Lee might be finalised on March 6. HYBE has additionally provided to buy one other 25 per cent stake within the company from different traders, per Bloomberg. SM’s prime executives, together with its co-CEOs, have issued a press release stating their opposition to any “hostile takeover from outsiders, including HYBE”, the publication reviews.
According to CNBC, after the announcement, SM’s shares jumped by over 16 per cent on the open in Seoul and HYBE’s by 6 per cent. Competing Ok-pop labels JYP Entertainment and YG Entertainment – identified along with SM because the “Big Three” companies of Ok-pop – additionally noticed their shares rise, the previous by 2.5 per cent and the latter by 3.8 per cent.
HYBE’s transfer to take over SM comes following yesterday’s information that HYBE America had acquired Quality Control (QC) Media Holdings, which is residence to US hip-hop acts together with Migos, Lil Yachty, City Girls and Lil Baby. The acquisition marks Scooter Braun’s first main transfer as the only real CEO of HYBE’s US division, a task he formally assumed in January.
It additionally comes on the heels of Kakao asserting on Tuesday (February 7) its acquisition of a 9.05 per cent stake in SM which might have made the South Korean tech firm, after Lee Soo-man, the second-biggest shareholder within the firm. Lee’s authorized counsel alleged that Kakao’s acquisition of firm shares was an “act of illegality” and filed an injunction to cease the transaction.
A joint assertion from HYBE chairman Bang Si-hyuk and Lee on the deal mentioned that each executives “mutually agreed on the shared vision for the future of [the] K-pop industry”.
“HYBE fully agrees with former Chief Producer Lee’s strategic initiatives including metaverse, a multi-label system, and the sustainable vision campaign,” Bang and Lee’s joint assertion reads, per Variety. “Leveraging our capabilities and resources, HYBE will further strengthen the presence of K-pop in the global stage.”