BTS agency Big Hit files review for IPO

A photo taken on May 15, 2019, shows K-Pop band BTS performing on the 'Good Morning America' show in New York. PHOTO: REUTERS

SEOUL (BLOOMBERG) - Big Hit Entertainment, the manager of K-pop boy band BTS, filed for an initial public offering in South Korea in a test of investor appetite in the midst of global efforts to end the coronavirus pandemic.

The statement issued on Thursday (May 28) by the Korea Exchange didn't include the planned size of the offering or a timeline. The deal could give Big Hit a market capitalization of as much as 2 trillion won (S$2.29 billion), the Korea Economic Daily reported, citing financial industry sources it didn't identify.

Big Hit has helped popularise K-pop, adding to the rising global visibility of Korean entertainment including TV dramas popular across Asia and films like "Parasite," the surprise winner of this year's Academy Award for best picture.

April was to have marked the start of the 2020 Map of the Soul world tour for global sensation BTS, which sold 1.3 million concert tickets last year, but has now been sidelined by travel restrictions and safety measures amid the global pandemic.

The company said in 2017 it was considering a listing and has built the seven-member ensemble into one of the world's top live draws, grossing US$170 million (S$241.4 million) n 2019, ranking it fifth, just behind Elton John, according to concert trade publication Pollstar.

The planned sale will test investor confidence in the outlook for K-pop, given that shares of listed rivals SM Entertainment, home to boy band EXO, have slumped 31 per cent this year amid concert cancellations.

The Big Hit filing also suggests IPO activity in South Korea is picking up after a lull. SK Biopharmaceuticals is close to launching an offering that could raise as much as US$779 million, the biggest the country has seen in three years, while ESR Cayman is planning a float of its Korean assets later this year.

Founder and chief executive officer Bang Si Hyuk owns 45.1 per cent of Big Hit, according to the filing. The company reported net income of 72.4 billion won and revenue of 587 billion won in 2019.

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