[Featured Stock] HYBE Rises Sharply as SM Steps in as White Knight... Simultaneous Surge

[Asia Economy Reporter Kwon Jae-hee] On the 10th, SM Entertainment (SM) recorded a rise of over 10% in the stock market following news that HYBE would acquire shares from SM founder and major shareholder Lee Soo-man. HYBE also showed a concurrent upward trend. Meanwhile, Kakao, which had previously become SM's second-largest shareholder, is experiencing a decline.

As of 9:42 a.m. on the same day in the KOSDAQ market, SM was trading at 110,100 KRW, up 11.78% from the previous trading day. During the session, SM's price briefly rose to a high of 117,000 KRW before giving up some of the gains.

HYBE, acting as SM's white knight, is also trading up 6.15% at 210,500 KRW.

However, Kakao, which had previously become SM's second-largest shareholder, recorded a decline of 4.37%, trading at 67,800 KRW.

HYBE announced on the same day that it will acquire 14.8% of shares held by Lee Soo-man, SM's major shareholder and former chief producer, for 422.8 billion KRW.

HYBE also stated that it will conduct a public tender offer for shares held by small shareholders of SM at 120,000 KRW per share, which is the same price as the acquisition price for Lee Soo-man's shares.

In the securities industry, it is expected that if HYBE completes the acquisition of SM shares, its position as the largest operator securing the top-tier K-pop intellectual property (IP) will be solidified.

Previously, on the 7th, SM's board of directors held an emergency meeting and resolved to issue new shares and convertible bonds to Kakao through a third-party allotment, resulting in Kakao securing a 9.05% stake and becoming the second-largest shareholder.

In response, Lee Soo-man's major shareholder side filed an injunction to prohibit the issuance of third-party new shares and convertible bonds, intensifying the management rights dispute.