The CEO of South Korean leisure big HYBE, which is transferring to change into the most important shareholder in SM Leisure, has reportedly stated the latter label will be capable to retain its independence.
Final week, HYBE introduced that it had struck a deal to purchase 3.5million shares in SM Leisure from its founder Lee Soo-man and subsequently purchase a 14.8 per cent stake within the company, which is considered one of Okay-pop’s longtime “Massive Three” labels alongside JYP Leisure and YG Leisure. The deal, as soon as finalised on March 6, will make HYBE the most important shareholder in rival label SM.
HYBE has additionally supplied to buy one other 25 per cent of SM from minority shareholders. Nevertheless, SM’s prime executives, together with its co-CEOs, have said their opposition to any “hostile takeover from outsiders, together with HYBE”.
At a briefing session held for HYBE workers on Monday (February 13), CEO Park Ji-won reportedly shared that SM Leisure would be capable to retain its independence following its acquisition by HYBE.
“We respect SM’s legacy. We’ll guarantee SM’s independence… HYBE has already proved the worth of its multi-label system,” Park stated, as reported by Yonhap Information Company.
There are a number of labels at the moment working underneath HYBE, together with Massive Hit Music, Pledis Leisure and Supply Music, the latter two of which have been acquired by HYBE. By means of these labels, HYBE’s present roster contains artists like BTS, Tomorrow X Collectively, SEVENTEEN, LE SSERAFIM and extra.
The Yonhap report cites trade sources who additionally declare that Park stated HYBE intends to assist SM “preserve and broaden” its personal worth. Park additionally reportedly introduced that SM founder Lee Soo-man, from whom HYBE had agreed to purchase shares, will not take part within the firm’s administration and manufacturing and “take no extra royalties”.
In keeping with a Reuters report yesterday (February 13), South Korean regulators are intently monitoring the HYBE and SM deal, noting its unprecedented scale.
“Although there have been acquisition offers involving small and medium-sized leisure businesses, a deal on this scale is a primary for us,” stated Im Younger-kwang, the top of the worldwide mergers and acquisitions division on the Korea Honest Commerce Fee.
“When a merger and acquisition takes place, we have a look at varied companies underneath these firms, together with administration, file gross sales, streaming, excursions and merchandise,” Im instructed Reuters.
“We have a look at whether or not they may achieve market dominance to make sweeping adjustments within the costs and high quality of their providers out there.”
Days earlier than HYBE introduced its acquisition of Lee’s SM shares, South Korean tech firm Kakao additionally revealed that it might quickly purchase a 9.05 per cent stake within the company, which might have made it the second-largest shareholder of the corporate after Lee Soo-man.
In response, Lee’s authorized counsel alleged that Kakao’s acquisition was an “act of illegality”. He has since filed an injunction to cease the transaction.
