(BREAKING) HYBE suspends SM Entertainment acquisition after reaching agreement with Kakao

MOVES have issued a new statement regarding the agreement they have entered into Cocoa over SM Entertainment.

The statement released on March 12th KST has the company announcing that they have suspended the SM Entertainment takeover process as of that day. It reads as follows:

“HYBE will suspend the acquisition process of SM Entertainment (hereinafter SM) from March 12. HYBE judged that the market was overheated due to the competition with Kakao and Kakao Entertainment, and made a decision after considering that this could have a negative impact on HYBE’s shareholder value.

HYBE set an appropriate purchase price range that took into account the tangible and intangible costs that could arise in SM’s post-merger integration from a medium to long-term perspective, acquiring the shares of former general producer Lee Soo Man, and executing a tender offer. In the current situation, where competition is intensifying due to further purchase offers from Kakao and Kakao Entertainment, and even the stock market is showing signs of overheating, it was judged that the price to be offered for the acquisition of SM exceeded the appropriate range.

HYBE made the decision to suspend the takeover process considering that pursuing the takeover of SM, even while conducting a counter-offer, could have a negative impact on HYBE’s shareholder value and further fuel the overheating of the market.

Due to this situation, discussions with Kakao recently took place and the two companies reached a comprehensive agreement. HYBE agreed to suspend the process of taking over management rights from SM and at the same time agreed on ways to collaborate on platforms between the two companies.

Hive, which decided to suspend the SM acquisition process after extensive consideration of internal and external factors, expressed its gratitude to all those who have supported and encouraged the SM acquisition.”

Meanwhile, as previously reported, rumors of Kakao and HYBE reaching an agreement began on March 10. The two had been competing to become the largest shareholder in SM Entertainment before the March 31 shareholder meeting.

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