Photo: Girls’ Generation | By Michelle Toh and Gawon Bae, CNN | Kakao, one of South Korea’s top internet giants, has doubled down on its quest to take control of SM Entertainment, the iconic K-pop music agency. The tech firm announced Tuesday that it would seek to buy up to 35% of the music label, just days after a previous share sale between the two parties was blocked by a Korean court. If successful, it would own about 40% of the company.
Kakao and its entertainment unit have launched a tender offer totaling approximately 1.25 trillion Korean won ($962 million), according to a regulatory filing. It plans to offer SM shareholders 150,000 won ($115) per share. That would be a significant premium to what they were offered just last week by HYBE, another Korean music agency best known for its representation of superstar boy band BTS.
If successful, it would also make Kakao SM’s biggest shareholder, a position currently held by HYBE, K-pop’s top agency due to the success of BTS.
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Tangled mess
SM was founded by Lee Soo-man, a legendary music producer who is widely referred to in South Korea as “the godfather of K-pop.” The company is known for representing hit artists, such as NCT 127, EXO, BoA and Girls’ Generation.
Recently, Lee has been battling his firm’s management on multiple fronts — including how much of the company should be sold to either Kakao or HYBE.
HYBE entered the fray last month, when Lee sold most of his personal shares to the agency for 422.8 billion Korean won ($334.5 million). He retains a stake of 3.65%, according to a Monday regulatory filing.
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On Friday, the Seoul Eastern District Court accepted Lee’s injunction request, banning SM Entertainment from selling new shares or issuing convertible bonds to Kakao, Lee’s legal representative told CNN in a statement.
Kakao’s gamble
Kakao is pressing forward nonetheless, inviting SM shareholders to accept its tender offer, which ends on March 26.
Kakao wants a strategic business partnership with SM, “judging each other to be the best partners” to compete against global entertainment conglomerates.
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Read the full article here:
https://www.cnn.com/2023/03/07/media/south-korea-sm-entertainment-deal-kakao-bid-intl-hnk/index.html
Photo: Girls’ Generation
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March 9, 2023| Music-Related Business| Barb Dye