Breaking: HYBE has announced that it has withdrawn from the acquisition of SM after reaching an agreement with Kakao

HYBE announced that it will “stop the acquisition process of SM Entertainment”.

On March 12, HYBE released an official statement announcing the end of their highly public battle with Kakao to acquire SM Entertainment’s shares.

Last month, HYBE signed an agreement with SM Entertainment founder Lee Soo Man to acquire a 14.8 percent stake in the company, making them the largest shareholder. The deal came in response to Kakao’s attempt to acquire a 9.05 percent stake in SM Entertainment by purchasing newly issued shares and convertible bonds—an attempt Lee Soo Man denounced as illegal and successfully blocked by suing SM Entertainment. was decided for.

Since SM Entertainment is legally prohibited from issuing new shares or convertible bonds to Kakao, the conglomerate tried to buy shares from existing shareholders instead. Earlier this week, Kakao made a new tender offer to SM Entertainment shareholders at a higher price than HYBE’s recent offer.

Two days ago, it was reported that HYBE and Kakao had reached an agreement in the battle for the management rights and control of SM Entertainment, and as a result, it was confirmed that HYBE had withdrawn from the purchase.

According to a press release, HYBE “made this decision after observing that the market was showing signs of overheating due to competition from both Kakao and Kakao Entertainment.”

The agency added, “HYBE considered the possibility that this acquisition could harm (HYBE’s) shareholder value and fuel overheating when making the decision along with the tender offer.”

HYBE and Kakao not only agreed on the management of SM Entertainment, but also agreed to “cooperate on platform-related matters” in the future.

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