On August 3, HYBE, CJ, and Kakao Entertainment, three of the biggest entertainment and media agencies in Korea, were reported to be bidding for Lee Soo Man's SM Entertainment shares.
With about 18.73 percent of the company's stock, Lee Soo Man is the company's largest shareholder. Whoever acquires his stake is expected to gain managerial control of SM Entertainment. According to Hankook Kyungje, HYBE, CJ, and Kakao Entertainment have joined the SM Entertainment purchase war and are providing a variety of scenarios to the company in an attempt to win.
According to SM Entertainment, "there are various conversations on business collaborations and equity investment," but "nothing has been settled thus yet."
Kakao Entertainment, the most likely buyer, has reportedly offered more than 2.5 trillion won ($2.2 billion) for SM Entertainment and its management rights. Much of the dialogue is between Lee Soo Man and Kim Bum Soo, Kakao Entertainment's chairman and largest shareholder.
CJ, on the other hand, is viewed as a dark horse who might put Kakao Entertainment's purchase of SM Entertainment in jeopardy. According to sources, CJ vice chairman Lee Mi Kyung plans on returning to Korea to visit with Lee Soo Man.
Another strong contender is HYBE. The label allegedly offered SM Entertainment more money than Kakao Entertainment, but Lee Soo Man allegedly declined.
Industry experts predict that the purchase price will reach to a maximum of 4 trillion won (about $3.5 billion). Foreign investors, including as Morgan Stanley, are also pushing for more SM Entertainment stock, according to the analysts.
The market capitalization of SM Entertainment is currently 1.38 trillion won ($1.2 billion), less than a tenth of the market capitalization of HYBE, which is 11.3 trillion won ($9.9 billion). On the other hand, SM Entertainment is thought to be doing well in both domestic and global markets, with cheap stock prices.
“Various firms are being discussed as a result of Lee Soo Man expressing a desire to ‘start taking his hands off [of SM Entertainment]' and rumors of him selling his holdings in SM Entertainment,” a source in the financial investment industry noted. Because its second-quarter performance is projected to be beyond forecasts, SM Entertainment's worth will be high.”
As of 2:18 p.m. KST on August 4, SM CC's stock price had risen 1,055 won (approximately 92 cents), and the shares were trading at 6,000 won ($5.25). SM CC is a multi-platform popular entertainment firm that produces movies and television shows and is a part of SM.
At the same time, SM's stock gained 6,400 won (approximately $5.60) and is presently trading at 69,100 won (about $60.44). SM Life Design, a printing company that produces albums, also saw its stock price rise by 230 won (approximately 20 cents), bringing it to 3,560 won (about $3.11).
