The new owner of SM Entertainment, which owns EXO, Red Velvet and many other artists, has been slow to settle down. Negotiations for Kakao's acquisition of SM Entertainment are in the final throes. Because of the additional conditions proposed by SM chief producer Lee Soo Man icon, they are very embarrassed.
On the 27th, an insider at the Investment Bank (IBicon) said that Kakao Entertainment, a subsidiary of Kakao, plans to close the acquisition negotiations last week. The size and price of the sale were agreed upon in the grand framework, and they intended to buy 18.27% of the producer's shares, and the producer would then invest in KakaoEnter's transaction, with a total transaction value of about 1 trillion won.
But Producer Lee put forward harsh conditions at the final stage, and the negotiations fell into trouble. The producer proposed the conditions for KakaoEnter to participate in the operation as it does now, requiring that the above be filled in the contract. IB industry insiders said: "In order to cooperate with the various entertainment companies it already owns, Kakao Entertainment wants to acquire SM in order to adjust the operation of the body, so it is difficult to accept the producer's proposal. ”
It is reported that Li Producer also requires a fairly high annual salary. According to the analysis, the producer's personal company, Like Planning Company, received a royalty of 24 billion won from SM last year. An IB industry insider explained: "If KakaoEnter acquires SM, it will be difficult to generate income as it is now, so in order to make up for this, it is required to increase the annual salary." "Kakao has retained the contract for the time being and is negotiating the additional conditions proposed by the producer.
Industry insiders said: "Lee Producers has enough leeway to withdraw the sale to strengthen SM's operating rights. IB industry insiders said: "The addition of such conditions in the sale process can be considered as a demonstration outside the negotiation site", "SM last year walked a tightrope between Kakao and CJicon, the acquisition candidate, improving the negotiation ability, and this action is an extension line." ”
It seems that the new owner of SM can't be sure for a while and a half.
(PS: Kakao Entertainment is an entertainment company owned by South Korean IT giant Kakao, and Antenna Entertainment, owned by Liu Jae-seok icon, also became a subsidiary in August 2021.) )