Hive Halts Acquisition Process... Platform Collaboration with Kakao
Kakao to Secure SM Shares through Tender Offer by 26th
Kakao and HYBE, who had entered the bidding war to acquire SM Entertainment (SM), have reached a dramatic agreement. Kakao will take over the management rights of SM, and HYBE will engage in platform collaboration.
On the 12th, HYBE announced that it would halt the acquisition process of SM. It judged that the market was overheating due to the competitive structure with Kakao and Kakao Entertainment. This decision was made after comprehensively considering that it could negatively affect HYBE's shareholder value.
A HYBE official explained, "With Kakao and Kakao Entertainment's additional tender offers intensifying the competition and even the stock market showing signs of overheating, the price that must be offered to acquire SM exceeded an appropriate range. We considered that pursuing SM's acquisition by conducting a counter tender offer could negatively impact HYBE's shareholder value and further fuel market overheating."
In this situation, Kakao and HYBE recently sat at the negotiation table. The two companies reached a magnanimous agreement that Kakao would take over SM's management rights and collaborate with HYBE.
Kakao expressed its respect for HYBE's decision to halt the acquisition. With the uncertainty resolved by HYBE's decision, Kakao plans to proceed with the tender offer scheduled until the 26th as planned and to concretize business cooperation with HYBE.
Kakao emphasized that to respect SM's strongest assets and driving forces?the employees, artists, and fandom?it will guarantee autonomous and independent operation and accelerate global growth centered on the future vision and strategic direction, including the 'SM 3.0' proposed by the current management.
Jae-hyun Bae, Chief Investment Officer (CIO) of the Kakao community, said, "Based on SM's global intellectual property (IP) and production system, along with Kakao and Kakao Entertainment's IT technology and IP value chain business capabilities, we plan to create new synergy through the combination of IT and IP beyond the expansion of music IP. Through this, we will strengthen each company's global competitiveness and actively strive to make the K-culture industry another national competitive advantage."
He explained that through fair cooperation and competition with partners in the industry, they aim to elevate the status of K-culture in the global market and contribute to its substantial growth as South Korea's next leading export industry.
Additionally, the Kakao community added that considering the concerns of the public and financial authorities regarding the competitive process, they will do their best to swiftly and smoothly complete the acquisition based on the agreement with HYBE.
Meanwhile, SM stated that it respects the agreement between Kakao and HYBE. In a statement released that day, SM emphasized, "Taking this agreement as an opportunity, we will speedily advance the SM 3.0 strategy promised to shareholders, members, fans, and artists, and we will surely achieve the future vision of 'leaping forward as a fan- and shareholder-centered global entertainment company.'"
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