[BUSINESS] Kakao to take over SM as HYBE bows out

By Anna J. Park

The fierce battle between Kakao and HYBE over the management rights of SM Entertainment ended Sunday with HYBE giving up on its quest for its acquisition of SM. The mutual decision was reached three days after the two competing companies entered talks on Friday to solve the heated issue of who would take over SM’s management rights.
The fierce battle between Kakao and Hive over management rights of SM Entertainment (hereinafter referred to as SM) came to an end on Sunday when Hive gave up its acquisition of SM. The mutual agreement was reached three days after the two companies began negotiations on the heated issue of SM management succession last Friday.

With Sunday’s decision, Kakao will work toward a controlling stake in SM and its management rights, while continuing to seek cooperation with HYBE on its platform business.
With this decision, Kakao will strive to secure a controlling stake and management rights in SM, while continuing to promote platform business cooperation with Hive.

“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment,” Kakao said Sunday. “As a partner sharing mutually positive impacts, Kakao and Kakao Entertainment will continue various strategic cooperative relations with HYBE and SM Entertainment to help stoke the global status of K-pop and K-culture,” the big tech giant’s statement read.
In a statement on Sunday, Kakao said, “Kakao and Kakao Entertainment respect Hive’s decision to discontinue the acquisition of SM.” We will contribute to enhancing the global status of K-Culture, including K-culture.”

Kakao also vowed to guarantee the independent business operations of SM, aiming to materialize SM’s vision 3.0, the entertainment firm’s global strategic growth goals for the future.
Kakao announced that it would guarantee SM’s independent business operation with the goal of realizing the SM 3.0 strategy, which is SM’s future global growth goal.

“By combining SM’s global intellectual property (IP) and top-rated production system and Kakao’s IT technology and IP value chain business capabilities, we plan to create a new synergy of IP and IT that goes beyond the music business, while strengthening each firm’s global competitiveness,” Kakao said, adding that it will also start shaping up its business cooperation with HYBE.
Kakao said, “By combining SM’s global intellectual property (IP), top-notch production system, Kakao’s IT technology, and business capabilities of the IP value chain, we create new synergies between IP and IT beyond the music business, while simultaneously enhancing each company’s global competitiveness.” We plan to strengthen the business,” he added, adding that he plans to start business cooperation with Hive in earnest.

With uncertainties surrounding HYBE removed, Kakao and Kakao Entertainment said they will continue with their ongoing tender offer to purchase a 35 percent stake in SM until March 26 as originally scheduled.
With the uncertainty surrounding Hive resolved, Kakao and Kakao Entertainment announced that they would continue the tender offer to purchase a 35% stake in SM until the 26th, as originally scheduled.

Kakao launched the tender offer to purchase SM shares at 150,000 won per share ($113) on March 7, aiming to secure a significant stake in the K-pop entertainment company. Kakao’s tender offer price is 25 percent higher than HYBE’s tender offer for a stake in SM, which was 120,000 won per share and ended in failure in February. If Kakao succeeds in its tender offer, the big tech giant will hold a 39.91 percent stake in SM Entertainment.
On the 7th, Kakao started a tender offer to purchase SM shares at 150,000 won per share. Kakao’s tender offer price is 25% higher than the tender offer price of 120,000 won per share for Hive’s stake in SM, which was canceled in February. If Kakao succeeds in the tender offer, Kakao will own a 39.91% stake in SM.

KEY WORDS
■ quest search, search
■ acquisition (company) acquisition, purchase
■ mutual
■ take over (a company, etc.)
■ stake
■ materialize materialize[실현되다]
■ top-rated (to the public) most popular
■ Shape up (in a particularly good direction)[전개되다]
■ ongoing
■ tender bidding

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