Kakao wins control of SM Entertainment, one of South Korea’s most iconic music agencies


Hong Kong/Seoul
CNN
 — 

South Korean world wide web firm Kakao has grow to be the greatest shareholder of SM Amusement, winning a battle for command of a person of the country’s most iconic new music businesses.

Kakao and its amusement device have improved their stake in SM to 39.9%, they mentioned in a Tuesday regulatory submitting. Earlier, the agency had held 4.9% of SM.

Kakao ordered the supplemental shares for about 1.25 trillion Korean won ($963 million) via a tender present launched previously this thirty day period.

In securing a controlling stake, Kakao has found off rival HYBE, South Korea’s leading new music agency and household to boy band feeling BTS, soon after a bruising takeover fight.

In a individual Tuesday filing, HYBE stated it had bought some of its SM shares to Kakao, lowering its stake to 8.8%.

Kakao CEO Hong Eun-taek acknowledged the acquisition, telling shareholders Tuesday that the organizations would work to mix the strengths of Kakao’s tech knowledge and SM’s intellectual home and manufacturing abilities “to grow our collective development.”

“After the swift and amicable completion of the acquisition, we will kind the small business cooperation designs concerning Kakao, Kakao Amusement and SM Amusement, and share them with our buyers,” he extra.

Kakao raised eyebrows previously this thirty day period by doubling down on its quest to just take regulate of SM, seeking to get a larger piece of the songs label just days just after a previous share sale settlement among the two events was blocked by a South Korean courtroom.

SM was started by Lee Soo-gentleman, a legendary songs producer who is broadly referred to in South Korea as “the godfather of K-pop” for introducing the genre to a mass viewers. The firm is recognized for representing hit artists these kinds of as NCT 127, EXO, BoA and Girls’ Technology.

Not long ago, even so, it’s designed headlines for a unique cause: shareholder battles.

Lee has tussled with his firm’s administration on various fronts this yr — together with how substantially of the enterprise need to be offered to possibly Kakao or HYBE. He sold 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 experienced also tried using to improve its stake in the firm in the latest months, with its possess tender offer that failed to achieve traction.

Just after that, Kakao swooped in by offering SM shareholders 150,000 received ($115) for each share, substantially extra than HYBE’s past present of 120,000 won ($92) for every share. HYBE then formally termed off its takeover bid.

SM’s management claimed it required to go forward with Kakao since the two functions were aligned on how the agency should really run.

SM Entertainment’s inventory rose 3.5% on Tuesday pursuing the information, while Kakao’s shares were minimal improved.