HYBE acquires SM stake ahead of schedule

HYBE announced on March 22 that it has taken over the 14.8% stake of from SM Entertainment’s former general producer Lee Soo-man ahead of schedule. As a result, HYBE became one of SM's major shareholders.

On March 10, HYBE signed a contract to purchase 14.8% of the shares from SM's founder Lee for 422.8 billion won. HYBE's SM stake was originally scheduled to be acquired on the 6th of next month, but it was announced on the same day that the transaction was completed on the 22nd, 12 days earlier, through a correction notice. It was widely expected that HYBE will become the largest shareholder one day ahead of the general meeting of shareholders next month and complete the acquisition of SM in a stable manner. The remaining 3.65% of the general producer's equity is also subject to a foot option, a right to sell within one month from the time when the business combination is approved or one year from the date of transaction completion, whichever comes first. Therefore, the rest of Lee's stake can be acquired by HYBE by the end of the year at the earliest.

"We do not think of the latest acquisition as a hostile M&A. We have no intention of being hostile to each other. If Kakao has no interest in gaining management rights, we can fully consider a business alliance with the company," HYBE CEO Park Ji-won said at the HYBE conference call held on Feb. 21.

By Corporate Korea