Hive Halts SM Acquisition Process... "Transfers Management Rights to Kakao" (Update)

HYBE will halt the acquisition process of SM Entertainment (hereinafter SM) as of the 12th. It has agreed to transfer management rights to Kakao and continue platform collaboration.

HYBE judged that the market is overheating due to the competitive structure with Kakao and Kakao Entertainment, and after comprehensively considering that this could negatively affect HYBE's shareholder value, it made the decision.

[Image source=Yonhap News]

From a mid- to long-term perspective, HYBE set an appropriate acquisition price range considering SM's value and the tangible and intangible costs that may arise during the Post Merger Integration process, acquired shares from former Chief Producer Lee Soo-man, and proceeded with a public tender offer. However, due to additional public tender offers from Kakao and Kakao Entertainment intensifying the competition and the stock market showing signs of overheating, HYBE judged that the price to be offered for acquiring SM exceeded the appropriate range.

HYBE decided to halt the acquisition process, considering that pursuing the acquisition of SM even by conducting a counter public tender offer could negatively impact HYBE's shareholder value and further fuel market overheating.

In this situation, recent discussions with Kakao were made abruptly, and the two companies reached a magnanimous agreement. HYBE agreed to stop the acquisition process of SM's management rights and also reached an agreement on platform-related collaboration plans between the two companies.

After comprehensively considering internal and external factors, HYBE, which decided to halt the SM acquisition process, expressed its gratitude by saying, "We thank everyone who has supported and cheered us on regarding the SM acquisition."

This content was produced with the assistance of AI translation services.