SM Entertainment Co.’s Co-Chief Executive Officer Lee Sung-su said he will step down from his current role after a shareholder meeting in March, following turmoil caused by an escalating battle for control of the K-Pop entertainment giant.
(Bloomberg) — SM Entertainment Co.’s Co-Chief Executive Officer Lee Sung-su said he will step down from his current role after a shareholder meeting in March, following turmoil caused by an escalating battle for control of the K-Pop entertainment giant.
Lee said in a Youtube video posted on Friday evening that he has responsibility for the current situation that has pitted SM’s management against company founder Lee Soo-man, who has aligned with rival Hybe Co. in a hostile takeover bid. Hybe is K-Pop group BTS’s management agency.
Lee is stepping down as Hybe seeks to take control of SM by acquiring the founder’s 14.8% stake in the company and through a tender offer to buy up to 25% of shares from investors. The unprecedented tussle inside the K-Pop industry has intensified amid speculation that more suitors may emerge to challenge Hybe’s bid for the talent studio behind K-Pop’s first forays overseas.
SM’s share price has already jumped above Hybe’s tender offer price on bets that local internet giant Kakao Corp., which formed an alliance with SM to expand overseas business, may counter that bid.
A proxy fight is looming in March at SM’s annual general meeting as company management and Hybe seek to gain shareholders’ support to form a board that will be favorable to one or other side.
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