South Korean girl group aespa on the 2022 KBS Song Festival at Jamsil Arena on Dec. 16, 2022, in Seoul, South Korea.
The Chosunilbo Jns | Imazins | Getty Images
The K-pop agency behind BTS is ready to turn out to be the biggest shareholder of SM Entertainment — the legacy company known to have kickstarted the wave of recognition around Korean popular culture.
Hybe Co. agreed to accumulate a 14.8% stake held by SM Entertainment’s founder Lee Soo-man by March, in keeping with a filing early Friday morning ahead of Seoul’s market open — and pledged in a separate notice to purchase one other 25% stake.
That will make Hybe a top shareholder in SM Entertainment. Lee is currently SM Entertainment’s top investor with a 18.45% stake, in keeping with Refinitiv data, followed by South Korea’s National Pension Service, KB Asset management and Norway’s Norges Bank Investment Management, its latest filings showed.
The deal is targeted at “raising its competitiveness within the K-pop industry and producing a synergy effect,” Hybe said in its filing.
Shares of SM Entertainment soared on Friday, rising greater than 16% on the open in Seoul. Hybe rose 6% and JYP Entertainment rose 2.5%, while YG Entertainment gained 3.8%.
Girl group NewJeans attend the 2022 The Fact Music Awards on Oct. 8 in Seoul, South Korea.
Chung Sung-jun | Getty Images Entertainment | Getty Images
The agency can also be known for rising girl group NewJeans — which debuted within the Billboard’s Hot 100 with its hit “Ditto” last month inside six months of its debut.
SM Entertainment can also be the agency behind top bands Super Junior, Girls’ Generation and Red Velvet, a gaggle that performed in front of North Korean leader Kim Jong Un in 2018 at probably the most recent height of inter-Korean diplomacy, alongside then president Moon Jae-in.
Hybe purchased 3.5 million shares of SM Entertainment at 422.8 billion won ($334.2 million) — or 120,000 won per share, with a premium of greater than 20% compared with SM Entertainment’s closing price of 98,500 won as of Thursday’s market close.
That comes after South Korean web company Kakao announced plans to accumulate a 9% stake in SM Entertainment in a deal value 217 billion won. Kakao shares surged shortly after the announcement on Tuesday earlier this week and last traded greater than 4% lower on Friday.