[Asia Economy Reporter Yuri Choi] SM Entertainment (SM) has expressed opposition to Hive's tender offer, citing concerns over shareholder value damage.
On the 20th, SM stated in its "Opinion Statement on the Tender Offer" that it was a "unilateral tender offer without prior consultation or discussion with the company," and that "an attempt at a hostile tender offer would negatively impact corporate value."
SM criticized, "Hive has not presented any concrete plans on how it will enhance the company and shareholder value in the future," and added, "Rather, it is attempting to undermine the establishment of a business cooperation relationship between the company and the Kakao Group."
Concerns were raised that if Hive secures management rights of SM, there would be disruptions in pursuing business strategies. This is because company know-how and key personnel might be transferred to Hive or its affiliates, and SM-affiliated artists could be deprioritized in music and content production. SM added, "We cannot help but worry that the unique individuality and values that the company has developed will disappear."
It is expected that shareholder value could be significantly damaged in the long term. There are concerns that the promotion and execution of future core strategies, which have just begun, are at risk of being derailed. SM stated, "We announced a new vision, 'SM 3.0,' on the 3rd, and since then the stock price has steadily risen," and predicted, "Corporate value will continue to increase beyond the tender offer price (120,000 KRW per share) proposed by Hive, depending on the future business strategy execution."
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