HYBE gives up in battle for SM Entertainment

SM Entertainment headquarters in Seongdong District, eastern Seoul, on March 7. [YONHAP]

HYBE is abandoning efforts to purchase SM Entertainment.

"HYBE is halting the acquisition process for SM Entertainment from March 12," the company said Sunday, adding that intense competition has raised the acquisition cost "above the appropriate price range."

The company has been in a battle with Kakao to increase holdings in SM Entertainment.

HYBE initiated a tender offer at 120,000 won ($92) a share, but was only able to only able to buy 0.98 percent of the company through that process. Kakao followed with a tender at 150,000 won a share.

Continued efforts to purchase SM Entertainment shares could negatively affect shareholder value, HYBE said.

The company has not decided what it will do with the shares it currently owns. HYBE bought 14.8 percent of SM Entertainment from founder Lee Soo-man and added to that stake with the tender offer.

BY JIN MIN-JI [jin.minji@joongang.co.kr]