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Soo-Man Lee, Securing Friendship Share Dong-Bun-Seo-Ju
Discussion of the possibility of Hive’s tender offer
Kakao Up votes against the current managementFour directors of SM Entertainment whose tenure ends next month
Lee, the card to retake control of the board of directors ‘attention’
▶Market Insight February 8, 5:36 pm
Ahead of next month’s shareholders’ meeting SM Entertainment(98,700 +9.54%)War clouds are hanging over the Entertainment. It is because the current management, who joined hands with activist fund Align Partners and turned their backs on the largest shareholder, General Producer Lee Soo-man, attracted Kakao as an ally on the 7th.
General Manager Lee is also working hard to secure a friendly stake. from last year SM Entertainment Com2uS, a game company that has steadily bought shares, and BTS’s agency hive(197,600 +4.27%) etc. are mentioned as white knights of this general manager. In particular, led by Chairman Bang Si-hyuk hiveis also known to have considered a plan to purchase a portion of the controlling stake and a minority shareholder’s stake through a tender offer.
The key is the vote showdown at the general shareholders’ meeting in March. With the terms of all four directors coming to an end, attention is focused on what cards Lee will come up with to regain control of the board. Shareholder proposals must be submitted to the board of directors six weeks before the shareholders’ meeting, so time is running out.
○Lee Soo-man, can he regain the SM board of directors?
According to the investment banking (IB) industry on the 8th, hiveuntil recently SM EntertainmentI tinkered with the tender offer card for . It is said that a large domestic securities company took charge of consulting and arranging acquisition financing, and adjusted the tender offer price to 110,000 to 120,000 won per share. If the tender offer is successful hiveThe largest shareholder and general manager Lee as the second largest shareholder jointly managed the structure.
in the market SM EntertainmentIt is believed that the surprise opening of an emergency board of directors meeting on the 7th to carry out a paid-in capital increase for Kakao is not unrelated to this move by the general manager. This means that although voting rights for new shares cannot be exercised at the regular shareholders’ meeting in March, they are prepared for a situation where they have to vote at the extraordinary shareholders’ meeting. but SM Entertainmentand Kakao are sticking to the position that “the paid-in capital increase is for business synergy and has nothing to do with management rights disputes.”
General Lee this afternoon SM Entertainmentfiled an application for provisional injunction to prohibit the issuance of new shares and convertible bonds. The market expects that the company will make an attempt to regain control of the board of directors at the shareholders’ meeting next month while buying time by applying for a provisional injunction. SM Entertainment The term of office of all four members of the board of directors expires next month. These include three inside directors, including co-representatives Lee Seong-soo and Tak Young-jun, COO Park Joon-young, and outside director Ji Chang-hoon. Inside directors, except for outside director Ji, who is an alumnus of Lee’s high school, are against him. Align Partners CEO Lee Chang-hwan will be appointed as other non-executive directors at the shareholders’ meeting next month. In addition, it announced the composition of the board of directors to add three new outside directors through the temporary outside director candidate recommendation committee.
At the shareholders’ meeting in March, when the term of office for inside directors is extended for another three years and three outside directors recommended by Align Partners and others enter the board, it is evaluated that it will be realistically difficult for Lee to regain control of the board. This is because the dismissal of existing directors is a matter of special resolution that requires the consent of at least two-thirds of the members attending the shareholders’ meeting.
hive It is interpreted that the idea of promoting a tender offer came from this. This is because, from Lee’s point of view, if he transfers his stake to a strategic investor (SI) who will further grow the company and remains as the second-largest shareholder and participates in management, he can gain a justification to persuade minority shareholders. The optimal partner for this is the one who has raised BTS to become a world-class artist. hiveanalysis that it was.
However, when cacao appeared, hiveIt is unclear whether the company will go ahead with the tender offer. SM Entertainment The stock price rose to 98,700 won (9.54 percent) on the day, so the purchase unit price should be raised. Even if the tender offer is successful, it will not be easy to exercise management right away given the current composition of the board of directors. They have to bear the burden of holding votes through regular shareholders’ meetings or extraordinary shareholders’ meetings in March. hive An official said, “We have not received any official information regarding this.”
Reporter Cha Jun-ho chacha@hankyung.com
