Bang Si Hyuk’s HYBE Becomes SM’s Largest Shareholder

lee soo man and bang si hyuk
lee soo man and bang si hyuk
Credit: HYBE, SM

HYBE has acquired a stake in SM Entertainment, the rival K-pop powerhouse.

Today, HYBE announced the purchase of 422.8 billion won (about $334 million) shares — a 14.8% stake — and strengthened the company’s position as a leader in K-pop as it became SM’s largest shareholder.

The conflict between SM and Lee Soo Man accelerated after the label announced its new vision “SM 3.0” last Friday. Then four days later, a strategic partnership between SM, Kakao, and Kakao Entertainment was announced, and Kakao acquired a 9.05% stake in SM. Soon after, Lee Soo Man argued that “SM’s issuance of new shares and convertible bonds to secure Kakao shares is an illegal act.”

Then on the 9th, it was reported that Bang Si Hyuk would be backing up Lee. The label stated, “We are continuously reviewing matters related to the acquisition of shares, such as the tender offer for SM shares.” However, the very next day, HYBE officially became the largest shareholder of SM with a 14.8% stake.

“HYBE fully agrees with former Chief Producer Lee’s strategic initiatives including metaverse, a multi-label system, and the sustainable vision campaign. … Leveraging our capabilities and resources, HYBE will further strengthen the presence of K-pop in the global stage,” said Bang.

After the news hit the wire, SM’s co-CEOs Lee Sung Soo and Tak Young Jun released an official statement, calling it “a hostile takeover.” They continued, “The strategic alliance with Kakao is based on the company’s decision to accelerate the implementation of the SM 3.0 strategy and has nothing to do with the management dispute claimed by the largest shareholder… SM is not involved in privatization by a specific shareholder/group. We oppose it, and we will do our best to establish a sound and transparent governance structure and protect shareholder rights.”

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