BTS agency becomes biggest shareholder of K-pop industry rival SM
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BTS' management Hybe had also offered to purchase a further 25 per cent of the company from other shareholders.
PHOTO: REUTERS
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SEOUL - K-pop supergroup BTS’ management agency Hybe said on Wednesday that it had become the biggest shareholder of embattled rival SM Entertainment, whose founder has been mired in an ugly power struggle within his company.
SM was founded by Mr Lee Soo-man, who is widely referred to as “the godfather of K-pop” and credited for producing key figures in an earlier generation of artists, such as BoA, Girls’ Generation and TVXQ, who paved the way for the industry’s current success.
But hints of a power struggle eked out when SM’s co-chief executives, including Mr Lee’s nephew Lee Sung-soo, announced new plans for the company that notably excluded him.
In a regulatory filing on Wednesday, Hybe said it had purchased a 14.8 per cent stake in SM Entertainment for 422.8 billion won (S$434 million), a move it said is aimed at “strengthening competitiveness and creating synergy in the K-pop market”.
The 14.8 per cent stake is part of founder Mr Lee’s holdings of 18.5 per cent in SM.
Hybe’s purchase on Wednesday comes after an attempt by South Korean Internet giant Kakao to buy a 9 per cent stake earlier in February, a move that was quickly challenged by the elder Mr Lee, who filed for a court injunction.
Hybe had also offered to purchase a further 25 per cent of the company from other shareholders – an announcement met with fierce opposition from SM’s co-CEOs and executives, who accused the entertainment giant of a “hostile takeover”.
In a statement to SM fans, artists, employees and shareholders following the acquisition, Hybe’s CEO Park Ji-won promised full support for SM artists and urged top executives to refrain from making “hasty judgments”.
“We express our regret for causing concern to SM artists,” Mr Park said, adding: “As Hybe respects and cares for our own artists, we will respect and care for SM artists.
“Hybe and SM Entertainment will work together to create the best company that can stand shoulder to shoulder with the world’s top three major music companies.”
The purchase was made nearly two weeks earlier than its initial schedule of March 6, which Yonhap news agency said was likely an attempt to end the acquisition process smoothly ahead of a SM shareholders’ meeting in March. AFP
