K-pop supergroup BTS’s management agency HYBE said on Wednesday that it has become the largest shareholder in rival SM Entertainment, whose founder is mired in an unsightly power struggle within his company.
SM was founded by Lee Soo Man, who is widely referred to as the “godfather of K-pop” and is credited with creating key figures in an earlier generation of artists such as BoA, Girls’ Generation, and TVXQ, who paved the way. for the industry’s current success.
But hints of a power struggle emerged when SM’s co-CEOs, including Lee’s nephew, Lee Sung Soo, announced the company’s new plans that, in part, excluded him.
In a regulatory filing filed on Wednesday, HYBE said it has acquired a 14.8% stake in SM Entertainment for 422.8 billion won ($324 million), which it says aims to “strengthen competitiveness and create synergy in the K-market.” pop.
The 14.8 percent stake is part of Founder Lee’s 18.5 percent stake in SM.
Wednesday’s purchase of HYBE comes after an attempt by South Korean internet giant Kakao to buy nine percent of the shares earlier this month – a move that was quickly challenged by the elder Lee, who filed an injunction.
HYBE also offered to buy out another 25 percent of the company from other shareholders, a move that met with fierce resistance from SM co-CEOs and executives, who accused the entertainment giant of a “hostile takeover.”
In a post-acquisition statement to SM fans, artists, employees, and shareholders, HYBE CEO Park Ji Won pledged his full support to SM artists and urged senior executives to refrain from “rushing judgments.”
“We are sorry for causing trouble to SM artists,” said Park, adding, “Because HYBE respects and cares about our own artists, we will respect and care for SM artists.”
“HYBE and SM Entertainment will work together to create the best company that can stand shoulder to shoulder with the top three music companies in the world,” he said.
The purchase came nearly two weeks ahead of the original schedule scheduled for March 6, in what Yonhap news agency said was likely an attempt to smoothly complete the acquisition process ahead of SM’s shareholder meeting next month.
© Agence France-Presse