HYBE has acquired an additional 3.64 percent stake in SM Entertainment for 104.3 billion KRW (approximately 78.2 million USD). This marks a major shift in the company’s ownership landscape. This transaction involves all the remaining shares of SM Entertainment held by its founder and former chief producer, Lee Soo Man. With this development, Lee Soo Man will no longer have any stake in the agency he built in 1995, home to K-pop acts like aespa and NCT.
The backstory to this development has to do with a decision Lee Soo Man made last year. He decided to sell a 14.8 percent stake in SM to HYBE during a contentious battle for control of the company involving Kakao. This latest purchase involves his 868,948 shares going for 120,000 KRW each. This price was significantly above the current share price. This move is the result of Lee Soo Man exercising his put option. This right was agreed upon during their previous transaction in February 2023.
@iqtaehyun i was SHOCKED when i saw this but it wont rlly affect the idols under sm. #leesooman #sm #smentertainment #nct #aespa #redvelvet #kpopfyp
HYBE now owns 12.6 percent of SM
Set to be finalized by March 7, this acquisition will increase HYBE’s stake in SM Entertainment to 12.6 percent. The initial purchase of Lee Soo Man’s shares was part of HYBE’s effort to gain a controlling interest in the agency, amounting to an investment of 422.8 billion KRW. But when Kakao emerged as the winner in the takeover battle, HYBE had to reduce its stake back to around 8 percent.
Kakao and Kakao Entertainment currently hold a combined 39.87 percent stake in SM. This means they’re the company’s largest shareholders. This intense battle reshaped the ownership structure of SM Entertainment and had significant repercussions for Kakao. Its chief investment officer, Bae Jae-hyun, is currently standing trial over allegations of stock price manipulation during the bid.
The sale of Lee Soo Man’s remaining shares to HYBE is a landmark moment in SM Entertainment’s history. It means the man who built the agency no longer has any ties to it as of this writing. As SM Entertainment turns the page, the rest of the industry is waiting to see how this development will change the K-pop scene in South Korea and beyond. – K-Pop News Writer
Featured Image: HYBE now has a larger ownership stake in the agency that was once one of its fiercest rivals. Source: X/@beyondthestarf.