[Courtesy of SM Entertainment]
The agency led by Bang Si-hyuk, the prodigy producer who created K-pop wonder BTS, said in a statement on March 12 that it will stop all acquisition processes of SM. Previously, HYBE and Kakao had engaged in a negotiation process since February 10 and the two companies agreed that Kakao would be in charge of the management while HYBE would cooperate by providing support through its platform.
HYBE explained: "We analyzed that Kakao and Kakao Entertainment's public acquisition intensified the competition amid the overheating stock market and the offering price for the acquisition of SM had exceeded an appropriate range," adding that the overheated stock market could bring a negative impact to HYBE's shareholder value.
Kakao said that the company respects HYBE's decision to withdraw from SM's acquisition process. "As a partner who shares mutual positive effects with HYBE and SM, we hope to continue to build various cooperative relationships so that we can further nurture the global recognition of K-culture including K-pop," the web service giant said.
According to Kakao, the company will create synergy by combining Kakao and Kakao Entertainment's information technology and music intellectual property (IP) businesses based on IP value chains, and SM's global IP and production system.
SM also expressed said that the company respects HYBE's decision. "Through this agreement, we will accelerate the SM 3.0 strategy we promised to fans and artists and keep our promise of achieving our future vision of becoming the fan and shareholder-centered global entertainment company," SM said. The appointment of directors will be made at the regular general meeting of shareholders on March 31.
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