Kakao secures 40 pct stake in SM Entertainment through tender offer

SEOUL, March 28 (Yonhap) -- South Korean tech giant Kakao Corp. said Tuesday that it has secured a total 40 percent stake in SM Entertainment through a tender offer, gaining management control over the K-pop powerhouse.

Earlier this month, Kakao and its entertainment unit, Kakao Entertainment Corp., had offered 150,000 won (US$115.4) per share to acquire an additional 8.33 million shares in SM Entertainment amid the intensifying battle with Hybe.

Through the tender offer, which ran from March 7 through Sunday, the two companies hold a combined 9.5 million shares, or a 39.87 percent stake, in SM Entertainment as of Tuesday, according to a filing by Kakao.

As a result, Kakao won the bidding war against Hybe to become the largest shareholder in SM Entertainment, the K-pop agency behind EXO, Aespa and NCT.

Hybe, which is behind the global superstar BTS, initially bought a 14.8 percent stake in SM Entertainment from SM founder Lee Su-man but later halted its takeover bid following an agreement with Kakao a few days after Kakao's tender offer started.

"We will create great synergy based on SM Entertainment's global K-pop intellectual property and production system and Kakao's IT and business capability," Kakao CEO Hong Eun-taek said during the shareholders meeting Tuesday. "We'll speed up the takeover process and announce our business plans among Kakao, Kakao Entertainment and SM Entertainment."

brk@yna.co.kr
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