BTS agency withdraws bid to take over SM Entertainment

SEOUL Reuters- HYBE Co Ltd, the agency representing top-selling South Korean boy band BTS, has dropped its plan to take over K-pop pioneer SM Entertainment Co Ltd, the company said on Sunday.

HYBE's withdrawal will allow Kakao to expand its entertainment business further, as it will end a weeks long takeover battle with social media giant Kakao Corp.

The price to acquire SM exceeded a fair range as the competition intensified, which led to the halt of the takeover bid by HYBE.

Kakao launched a 1.25 trillion won $946.80 million tender bid for up to 35% of SM Entertainment at 150,000 won per share, well above the 120,000 won per share offer from HYBE for a 25% stake that gained little traction with shareholders last week.

Shares in SM Entertainment closed Friday at 147,800 won.

After talks with Kakao, HYBE and Kakao agreed to cooperate on matters related to their platforms.

The takeover of SM was a recent effort by Kakao to expand its content and entertainment arm in recent years, according to Lee Jong-im, a Seoul-based culture critic.

Kakao Entertainment, a subsidiary of Kakao, has invested 12 billion won in Metaverse Entertainment, which specialises in virtual idol groups.

Kakao and SM EntertainmentSM Entertainment welcomed HYBE's decision to drop its bid.

Kakao and Kakao Entertainment will continue its tender offer until 26th to secure a further stake and work on the details of business cooperation between HYBE and SM, Kakao said in a statement.