Kakao and HYBE, two South Korean companies that had been locked in a competition for control over SM Entertainment, have come to a compromise. The exact details of the agreement have not been disclosed, but it is believed that the two companies have agreed on a structure that will not allow for a monopoly of SM Entertainment. The agreement came just before the SM Entertainment shareholder meeting on March 31 and was reached due to the belief that this type of monetary competition was not beneficial to either side.
Kakao and HYBE, two South Korean companies that had been vying for control over SM Entertainment, one of the original K-Pop management companies, have recently agreed to end their competition.
The agreement was reached on the 10th of March, ahead of the SM Entertainment shareholder meeting on the 31st of the same month. Although the exact details of the agreement have not been disclosed, it is rumored that the two companies have agreed on a structure that will not allow for a monopoly of SM Entertainment.
Kakao and HYBE had been engaged in a money battle worth $1 million. Kakao had attempted to make a 25% public offering of HYBE’s SM Entertainment shares, but failed to do so. As a result, Kakao announced on the 7th of March that they would purchase 35% of SM Entertainment’s shares, valued at $113 per share, by the 26th of March.
SM Entertainment’s stock price increased to nearly $121.21 after Kakao’s announcement of its public offering, but has since fallen below $113.63 as the stock price declined for two consecutive days. On the 10th of March, SM Entertainment’s stock price was traded at $111.96, marking a 4.58% decrease.
It is believed that the two companies reached this agreement because they deemed that this type of monetary competition was not beneficial to either side. The industry has expressed concerns that a rise in SM Entertainment’s stock price above $1980 could result in a “winner’s curse,” and financial authorities are reportedly investigating whether there was any unfair behavior, such as price manipulation, involved. Additionally, the opinions of K-Pop fans, who form the foundation of the genre, have been criticized for being disregarded in this corporate feud.
About Corporation
SM Entertainment
SM Entertainment is a South Korean entertainment company founded in 1995 by Lee Soo-man. It is one of the largest and most influential companies in the Korean entertainment industry and is credited with launching the careers of many successful K-Pop artists, such as TVXQ, Super Junior, Girls’ Generation, and EXO. The company offers a wide range of services, including artist management, music production, concert production, and brand management. SM Entertainment has been a major player in the K-Pop industry and has helped to shape its growth and development over the years.
KAKAO
Kakao is a South Korean technology company that operates a number of popular online and mobile services, including the KakaoTalk messaging app and the KakaoPay mobile payment service. In recent years, the company has expanded into the entertainment industry and has acquired a number of music and video content providers.
HYBE
Hybe Corporation, formerly known as Big Hit Entertainment, is a South Korean entertainment company founded in 2005 by Bang Si-hyuk. The company rose to prominence with the success of its flagship group, BTS, and has since become one of the leading entertainment companies in South Korea. Hybe has expanded its reach beyond K-Pop, investing in a variety of industries, including music production, concert production, and brand management. The company’s acquisition of Ithaca Holdings in 2021, which included the ownership of several American record labels, marked a significant step in Hybe’s global expansion.
