Article: HYBE takes over SM.. purchases Lee Soo-man's 14.8% stake becoming largest shareholder
Source: SBS
HYBE, BTS' agency has taken over its rival and largest K-pop agency SM Entertainment.
As a result, the K-pop industry is about to create a mega "dinosaur" agency with BTS, Seventeen, EXO and NCT under one roof.
On the 10th, HYBE announced plans to acquire a 14.8% stake held by Lee Soo-man, SM's major shareholder and former general producer for 422.8 billion won.
Kakao joined hands with SM on the 7th with a paid-in capital increase of 9.05% but HYBE joined hands with Lee Soo-man and quickly overtook them.
HYBE currently houses popular K-pop stars to include Seventeen, TXT, Enhypen, NewJeans, and Le Sserafim, led by BTS.
SM also has a number of competitive IPs such as TVXQ, Super Junior, SHINee, EXO, NCT and aespa so their combination is expected to have a big impact on the K-pop market.
Regarding the deal, HYBE stated, "The acquisition of SM is aimed at concentrating the global capabilities of both companies to become a game changer in the global pop music market. Prior to signing the contract, Chairman Bang Si-hyuk, founder and largest shareholder, and former SM Executive Producer Lee Soo-man shared concerns about the future of K-pop and formed a consensus on how to find a solution. One of the solutions was a stock transfer contract."
"Alongside the acquisition, we will also put a massive knife cut to SM's operating structure. We have confirmed Lee Soo-man's commitment to improving SM's governance structure. HYBE already has the highest level of governance transparency through our board-centered management. We will take an active role in improving SM's governance structure just as we have led industry advancement with a multi-label strategy operation and fandom platform development."
"I expressed my respects to Lee Soo-man for his development of K-pop into an industry. I also stressed my willingness to realize the global vision that Lee Soo-man has drawn that includes implementation of his metaverse (Kwangya), establishment of a multi-label system, and his campaign to save the earth. We will continue to expand on this."
"Lee Soo-man has decided to receive some fees for 3 years from the end of the contract between his private production company Like Planning and SM but decided not to receive them during the agreement with HYBE."
"As a measure to show his willingness to improve SM governance, Lee Soo-man also decided to fully cooperate with the improvement of SM's governance structure by transferring his personal stake in SM affiliates to HYBE."
We will also be taking public a bid for shares held by minority shareholders of SM at 120,000 won per share. This is the same price as Lee Soo-man's acquisition price. Financing for the open buyout has already been completed."
"We came to a consensus with Lee Soo-man to proceed with an open purchase in order to share the management premium he will enjoy with minor shareholders. We plan to create synergy in all business areas with the acquisition of SM as an opportunity.
As a result, the controversy over SM management rights triggered by the production reform plan (SM 3.0) excluding Lee Soo-man and Kakao's stake acquisition seems to have been settled with HYBE's sudden acquisition of SM.
The music industry is paying keen attention to SM's shareholder meeting scheduled for next month.
- [+1,062, -15] SM, stop taking in Chinese trainees!!
- [+730, -33] I prefer HYBE to Kakao. I hope with the takeover, they restructure the overlapping parts between the companies and develop into a top entertainment agency in the world..
- [+453, -4] The shrimp ate the whale.. Bang Si-hyuk is a legend!
- [+362, -5] Wow, I never imagined the day HYBE would acquire SM..
- [+336, -3] From Lee Soo-man's point of view, he will no longer have to fight in the mud and will be rewarded with 420 billion won cash. Seoul National University hoobae Bang Si-hyuk is the true winner in all of this..
- [+178, -34] Kakao didn't stand a chance
- [+123, -5] SM needs a change. If you look at the kids they're debuting these days, their singing and looks are so lacking.
- [+107, -3] When Bang Si-hyuk debuted BTS, no one thought things would turn out like this! Bang Si-hyuk who recognized Bangtan and Bangtan who raised HYBE are seriously jjang!
- [+80, -4] You did great putting a stop to Kakao's tentacle feet!
- [+27, -2] This is better than handing SM over to a rootless bully agency like Kakao.
- [+18, -0] MBC found at a crossroadsㅋㅋ. They gave all the preferential treatments to SM singers during Gayo Daejeon and ignored BTS causing frictions with HYBE. That's why HYBE singers haven't appeared on MBC for several years now. But now that SM has passed into HYBE's hands I hope Bang Si-hyuk doesn't let SM kids appear on MBC so that their music show disbandsㅋㅋ
- [+34, -2] As a fan, my heart really hurts ㅜㅜ SM will always be SM to me ㅠㅠㅠ
Additional source(s): Joongang Ilbo, Hankyung