ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print
Media & Entertainment

K-pop giant HYBE drops bid for SM Entertainment, ending takeover battle

Members of K-pop boy band BTS pose for photographs during a news conference in Seoul on Nov. 20, 2020.   © Reuters

SEOUL (Reuters) -- HYBE Co Ltd, the agency representing top-selling South Korean boy band BTS, dropped its plan to take control of K-pop pioneer SM Entertainment Co Ltd, the company said on Sunday.

HYBE's withdrawal put an end to a weeks-long takeover battle with social media giant Kakao Corp, and will allow Kakao to expand its entertainment business further.

HYBE said its decision to halt the takeover bid came after the price to acquire SM exceeded a fair range as the competition intensified.

Kakao last week launched a 1.25 trillion won ($946.80 million) tender bid for up to 35% of SM Entertainment at 150,000 won per share, well above the 120,000 won per share offer from HYBE for a 25% stake that gained little traction with shareholders.

On Friday, shares in SM Entertainment closed at 147,800 won.

HYBE said after talks with Kakao, the two companies agreed to cooperate on matters related to their platforms.

Lee Jong-im, a Seoul-based culture critic, said the takeover of SM was the latest of a series of efforts by Kakao to expand its content and entertainment arm in recent years.

In 2021, Kakao Corp acquired multiple content companies, including video game developer NFLY STUDIO.

Kakao Entertainment, a subsidiary of Kakao, also invested 12 billion won in Metaverse Entertainment, which specialises in virtual idol groups.

Kakao and SM Entertainment said they welcomed HYBE's decision to drop its bid.

"Kakao and Kakao Entertainment will continue its tender offer bid until the 26th to secure a further stake and work on the details of business cooperation between HYBE and SM," Kakao said in a statement.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more