Kakao goes all out with HYBE…”Tender offer for 35% stake in SM”
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Kakao and Kakao Entertainment announced today that they will begin a tender offer for a 35% stake in SM Entertainment (SM).
Kakao will tender 8.33 million SM shares at 150,000 won per share until the 26th of this month. This represents 35% of the total number of SM shares, which Kakao and Kakao Entertainment plan to purchase half and half. Kakao and Kakao Entertainment will invest up to 1.25 trillion won to secure a stake in SM. This is a declaration of all-out war against BTS’ management company HYBE.
Earlier, HYBE planned to secure a 25 percent stake in SM through a tender offer, but only gained 0.98 percent. The failure of HYBE’s tender offer, which gave it the upper hand in the race to acquire SM, prompted Kakao to strike back.
Kakao said, “The three companies have entered into a strategic business cooperation as they believe that they are the best partners to compete against the giant global entertainment companies. However, as the current business cooperation and growth direction are threatened, Kakao has decided that it is inevitable to secure the position of the largest shareholder in order to stabilize its partnership with SM.”
“Kakao has strong confidence in the outstanding competitiveness of SM’s current management team, employees, and artists, and respects the current management team’s efforts to address growth inhibitors and the future vision and strategic direction of SM Entertainment, including SM 3.0. Even after becoming the largest shareholder, Kakao will respect SM’s originality and ensure its independent operation. Based on this horizontal partnership, we will create strong synergies to enhance the competitiveness of K-culture and raise its global profile.”
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