SM Entertainment Co. plunged after Hybe Co. said it would back down from a takeover fight with Kakao Corp. for control over the smaller K-pop agency.
(Bloomberg) — SM Entertainment Co. plunged after Hybe Co. said it would back down from a takeover fight with Kakao Corp. for control over the smaller K-pop agency.
SM shares tumbled as much as 13%, the most since March 2020, in early trading Monday, after the BTS label said over the weekend that it was halting its bid for control of SM. The price of taking over SM exceeded the fair acquisition price range as competition with Kakao intensified, it said. Kakao rose as much as 5.9% while Hybe rose 3.5%.
Prior to Hybe’s announcement, a bidding war for SM against Kakao and Kakao Entertainment Corp. had almost doubled SM’s stock price since the start of the year.
Kakao and its entertainment unit will continue with the tender offer to increase their stake in SM by March 26, and will boost business cooperation with both Hybe and SM, Kakao said in a separate e-mailed statement.
Kakao’s $1 Billion Offer Catapults K-Pop Agency to New Record
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