South Korean internet enterprise Kakao has turn out to be the biggest shareholder of SM Leisure, winning a battle for handle of one particular of the country’s most legendary music companies.
Kakao and its leisure unit have enhanced their stake in SM to 39.9%, they mentioned in a Tuesday regulatory submitting. Beforehand, the firm experienced held 4.9% of SM.
Kakao purchased the added shares for about 1.25 trillion Korean won ($963 million) by means of a tender offer you released before this month.
In securing a controlling stake, Kakao has seen off rival HYBE, South Korea’s leading songs agency and residence to boy band feeling BTS, after a bruising takeover struggle.
In a separate Tuesday filing, HYBE mentioned it had marketed some of its SM shares to Kakao, reducing its stake to 8.8%.
Kakao CEO Hong Eun-taek acknowledged the acquisition, telling shareholders Tuesday that the companies would perform to combine the strengths of Kakao’s tech abilities and SM’s mental residence and creation competencies “to expand our collective growth.”
“After the swift and amicable completion of the acquisition, we will form the business enterprise cooperation ideas involving Kakao, Kakao Entertainment and SM Amusement, and share them with our investors,” he added.
Kakao raised eyebrows before this thirty day period by doubling down on its quest to choose handle of SM, searching for to get a even bigger piece of the new music label just days soon after a previous share sale agreement concerning the two functions was blocked by a South Korean court docket.
SM was established by Lee Soo-gentleman, a legendary music producer who is widely referred to in South Korea as “the godfather of K-pop” for introducing the genre to a mass viewers. The business is identified for representing hit artists this kind of as NCT 127, EXO, BoA and Girls’ Era.
Just lately, nevertheless, it is created headlines for a distinct reason: shareholder battles.
Lee has tussled with his firm’s administration on many fronts this yr — together with how significantly of the business need to be offered to both Kakao or HYBE. He offered most of his shares to HYBE for 422.8 billion Korean received ($334.5 million) in February, giving the company a 14.8% stake.
HYBE had also tried out to enhance its stake in the business in new weeks, with its own tender offer you that failed to get traction.
Just after that, Kakao swooped in by featuring SM shareholders 150,000 gained ($115) for every share, appreciably more than HYBE’s preceding give of 120,000 received ($92) per share. HYBE then formally referred to as off its takeover bid.
SM’s administration stated it preferred to shift ahead with Kakao due to the fact the two parties have been aligned on how the agency really should run.
SM Entertainment’s stock rose 3.5% on Tuesday following the information, although Kakao’s shares were being minor transformed.