Kakao makes public offer for K-Pop production company SM
Seoul, Mar 7 (EFE).- South Korean technology giant Kakao announced Tuesday a public offer to become a majority shareholder of SM Entertainment, one of the main K-Pop music producers, a new step in the war it maintains for control of this record label.
Kakao and its entertainment unit, Kakao Entertainment, are offering KRW 150,000 ($115.4) per title through Mar. 26.
The goal is to acquire an additional 8.33 million shares of SM for a total stake of 35 percent, the company said in a statement.
The price offered for Kakao is above SM’s yesterday’s close on the Seoul Stock Exchange (KRW 131,000 won/$100).
It also exceeds the KRW 120,000 public offer recently raised by its rival in this particular battle, music production company Hybe.
Hybe’s public offering expired last week and ended in failure, as it managed to grab less than an additional 1 percent of SM.
Today’s announcement comes after a battle for control of the production company between Kakao and Hybe opened in late February, which on those dates respectively took 9 percent and 19 percent of SM’s shareholding.
Last week, under a lawsuit by Hybe, a court froze the issuance of new SM shares and convertible bonds to add to Kakao’s portfolio.
The dispute between Kakao, which controls several of the most used mobile applications on a daily basis in South Korea, and Hybe, the music agency behind the global phenomenon BTS, may be key to the future of the K-Pop industry, one of the great cultural exports of the country.
SM is one of the three great music producers that gave rise to the industry and, in addition to having launched legends such as Girls’ Generation or Shinee, currently represents groups like EXO, NCT or Red Velvet, who will perform at Primavera Sound this year. EFE
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