SEOUL, South Korea (CelebrityAccess) — South Korean internet company Kakao announced it will seek to purchase up to 35% of the K-Pop entertainment giant SM Entertainment.
If successful, the acquisition would see Kakao control approximately 40% of the company, making them SM Entertainment’s largest investor.
The bid from Kakao tops an offer from Hybe, South Korea’s leading K-pop agency, which already owns almost 16% of SM and sought to acquire an additional 25% stake of the company last week.
In their bid, Hybe offered approximately $92 per share while Kakao’s most recent bid equated to $115 per share, representing a significant premium.
Hybe, who represents K-Pop icons such as BTS, is currently the company’s largest shareholder.
Founded in 1995 by Lee Soo-man, a noted producer who is widely regarded as the “godfather of K-pop”, SM Entertainment represents a roster that includes K-Pop groups such as Girls Generation, Girls On Top, and Aespa.
However, Lee has been at odds with SM Entertainment’s management in recent months, including on whether the company should be sold to outside investors, including Hybe.
Lee appears to favor Hybe as a partner and sold a significant portion of his own shares to the company last month. In addition, he successfully sought a legal injunction preventing SM Entertainment preventing SM Entertainment from selling new shares or issuing convertible bonds to Kakao, requiring them to instead buy shares from existing stockholders.
SM Entertainment’s management appears to prefer Kakao and in a recent statement to CNN, characterized Hybe’s acquisition bid as a “hostile takeover.”