News on the evening of February 9, HYBE finally announced its response based on the inquiry publicity requirements for the promotion report of SM Entertainment's share acquisition.
HYBE said: "Matters related to the acquisition of shares such as the public acquisition of SM Entertainment shares are ongoing, and there are no confirmed matters at present. In the future, it will be announced again when the specific matters are determined or within one month. ”
This morning, the news that HYBE as a "white knight" will take a stake in SM spread wildly, and even once appeared on Weibo hot search, attracting onlookers from Chinese netizens.
According to Korean media reports, HYBE's formal participation in the acquisition of SM is: HYBE's acquisition of the shares of Li Xiuman, the single largest shareholder of SM Entertainment, as the chief producer (18.46%); At the same time, public acquisitions will be carried out to explore plans to ensure the stability of management right shares.
Obviously, this news is a bad factor for Kakao, who works hand in hand with "SM management who deviates from Lee Xiuman".
On February 7, South Korean Internet giant Kakao announced the acquisition of 9.05% of the shares of SM Entertainment, becoming the second largest shareholder of Korean entertainment giant SM.
According to Kakao, Kakao subscribed for 1.23 million shares issued by SM Entertainment in the form of a third-party rights issue and increased its holdings by 1.14 million shares by subscribing to convertible corporate bonds, for a total holding of 217.152 billion won (about 172.7 million US dollars). At the same time, Kakao also signed a tripartite working cooperation agreement with Kakao Entertainment and SM Entertainment, which plan to take the lead in improving the global status of K-POP culture.
It is worth noting that Li Xiuman, the largest shareholder of SM Entertainment, accused Kakao of obtaining shares of SM Entertainment through illegal means, and said that disputes were occurring within SM Entertainment over operating rights. Under such circumstances, it is clearly illegal for the SM Council to sell new shares and convertible corporate bonds to third parties by the SM Council, led by the company's management.
In this regard, Li Xiuman will apply to the court to prohibit SM Entertainment from issuing new shares and convertible corporate bonds, eliminating the illegal attempts of the SM Council from the source, and will also pursue the criminal and civil legal liabilities of the council members for approving illegal transactions.
Regarding Li Xiuman's statement, Kakao said that the purchase of shares of SM Entertainment was only a decision made purely for business cooperation and had nothing to do with SM Entertainment's recent infighting. Kakao's partnership with SM Entertainment is aimed at strengthening competitiveness in the music and content sector.
"Through this investment partnership, we look forward to the two companies working together to deal with the fierce competition in the global music and content market and target the global mainstream K content, which will be of great help to each other." Bae Jae-hyeon, Executive Vice President of Kakao Corp, said, "Through multifaceted cooperation, we will contribute to expanding the global influence of Korean culture. ”
Kakao expects the transaction to generate significant synergies as Kakao Entertainment has an IP value chain that covers story, music and media planning and production capabilities, platforms and artists, while SM Entertainment is supported by a global K-POP boom.
Through this investment partnership, Kakao Entertainment and SM Entertainment are leveraging their respective overseas partners and other networks to jointly promote global management business, and jointly create new K-POP artists through global auditions to strengthen intellectual property competitiveness.
In addition, Kakao plans to continue to collaborate on various businesses, including the production and distribution of global albums, and the three companies will also use Kakao's technological capabilities such as artificial intelligence to jointly prepare for future businesses.