Kakao to purchase SM Entertainment shares via tender offer

[KAKAO]

Kakao is offering to purchase SM shares in the open market via a tender offer at 150,000 won ($116) per share, in its latest move against HYBE in the SM Entertainment takeover battle.

The tech company currently possesses a 4.9 percent stake in SM and plans to purchase additional stake to ultimately get their hands on 39.9 percent of the company.

The offer will be valid until March 26.

If Kakao succeeds, it will become the largest shareholder of the K-pop agency, behind boy band NCT and girl group aespa.

Before, HYBE attempted to purchase SM shares at a tender offer of 120,000 won apiece to gain a total 40 percent stake. Its attempt failed, and it now owns 15.78 percent of the agency and is the largest shareholder of SM.

HYBE bought 14.8 percent of SM Entertainment from its founder Lee Soo-man for 422.8 billion won last month.

“Kakao is strongly confident about the competitiveness of SM Entertainment’s current board, employees and artists and respects its new vision of ‘SM 3.0’ which is to ultimately get rid of factors that hinder the company’s growth,” Kakao said in a statement. “Even after Kakao becomes the largest shareholder, we plan to respect SM Entertainment’s originality and support the company’s independence in management. Based on an equal partnership, the two companies will create a powerful synergy to strengthen the competitiveness of K-culture.”

SM Entertainment shares climbed 0.7 percent to close at 130,100 won on Monday. As of 9:53 a.m. Tuesday, SM share jumped 13.45 percent to trade at 147,600 won.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]