The content originally appeared on: CNN
BTS agency HYBE says it has called off a takeover bid for SM Entertainment, ending weeks of corporate mudslinging that has dominated headlines in South Korea.
HYBE said Sunday it made its decision “after observing that the market has been showing signs of overheating due to competition with both Kakao and Kakao Entertainment.”
“The company has also taken into account the potential negative impact on HYBE’s shareholder value,” it said in a statement to CNN.
Last week, tech giant Kakao and its entertainment unit said they had doubled down on their quest to take control of SM, the iconic K-pop music agency. They sought to buy up to 35% of the music label, just days after a previous share sale agreement between the two parties was blocked by a South Korean court.
Kakao offered SM shareholders 150,000 won ($115) per share, much more than HYBE’s previous offer of 120,000 won ($92) per share, which garnered only mild interest from investors.
There were concerns in the industry that HYBE’s bid to take a greater stake in SM — which is known for representing hit artists such as NCT 127, EXO, BoA and Girls’ Generation — would unfairly dominate the world of K-pop. HYBE Chairman Bang Si-Hyuk had rejected those accusations in an exclusive interview with CNN’s Richard Quest.
HYBE currently owns 15.8% of SM. That ownership is derived from shares gained from its tender offer and its previous holding of 14.8% purchased last month directly from Lee Soo-man, the founder of SM and a legendary music producer widely referred to in South Korea as “the godfather of K-pop.”
In the Sunday statement, HYBE said the price of acquiring SM had “exceeded the fair acquisition price range as the competition with both Kakao and Kakao Entertainment intensified.”
Both companies have agreed to “cooperate” on matters related to their platforms in the future, it said.
SM Entertainment said in a statement that it “welcomes” HYBE’s decision to suspend its takeover bid.
Kakao and its entertainment unit will continue with their existing tender offer to SM shareholders, which will wrap up on March 26, they told CNN.