SEOUL, South Korea (CelebrityAccess) – HYBE, the South Korea-headquartered music giant, has pulled out of its planned deal to secure 40% of K-pop entertainment company SM Entertainment (SM). HYBE, which is home to several K-pop acts including BTS has become involved in a bidding war with the online and social media company Kakao Corp.
Hybe already owns almost 16% of SM and sought to acquire an additional 25% stake in the company earlier this month. However, Kakao announced it will seek to purchase up to 35% of SM after Hybe’s offer was on the table.
HYBE offered approximately $92 per share while Kakao’s most recent bid equated to $115 per share, representing a significant premium. However, HYBE decided to withdraw its bid and said in a statement on Sunday (March 12) that the decision was down to the market “overheating.”
HYBE’s proposal to expand its stake did not receive shareholder support with SM Entertainment management at odds with founder Lee Soo-man. Last month, CFO Jang Cheol Hyuk described the Hybe offer as a “hostile takeover attempt.”
Kakao and SM Entertainment said they welcomed HYBE’s withdrawal from the bidding.
“Kakao and SM Entertainment will continue its tender offer bid until March 26 to secure a further stake and work on the details of business cooperation between HYBE and SM,” said a statement.
SM is currently home to K-pop acts including SHINee, EXO, and NCT Dream.
