>> HYBE Officially Becomes the Largest Shareholder of SM
While HYBE expressed concern over the contents of the business cooperation agreement signed between SM Entertainment and Kakao, SM responded with an official statement.
Previously, HYBE stated that the convertible bond acquisition contract between SM and Kakao undermined the interests of shareholders and announced their plan to take all necessary civil and criminal legal measures.
According to HYBE, SM gave Kakao Entertainment exclusive rights to important business rights, such as music distribution, for an unlimited time. And if that’s true, SM artists’ North/South American activities would be reorganized and led by Kakao.
Regarding it, SM responded, “It’s not true that we handed over the rights for the distribution of SM artists’ albums/sound sources to Kakao for ‘unlimited time.'” They elaborated, “It is absurd to claim that the lack of details for each item in the business cooperation contract means handing the rights over indefinitely, and the details will be discussed when conducting individual contracts in the coming days.”
SM added, “Kakao Ent. is not managing SM artists’ promotions in North/South America. We plan to cooperate by creating a joint venture in the continent.”
“HYBE’s hostile M&A leads to K-pop monopoly,” the agency stressed. “If HYBE acquires SM, SM has serious concerns that it will inevitably fall under HYBE’s weak governance.” They went on, “This hostile takeover is not a way to promote the development of the domestic K-pop industry through goodwill competition, but a way to eliminate strong competitors and launch J-pop business ‘for HYBE, by HYBE, of HYBE.'”
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