Kakao and its entertainment arm are eyeing a 35% stake in SM via aworth $962 million. The bid comes less than a week after Hybe's lower offer backfired, as it bought just 1% of the shares, falling short of a 25% goal. If Kakao succeeds, the company, which has the backing of SM's management, would become the label's top shareholder.
It's unlikely $6 billion Hybe can sustain a bidding war. Kakao Entertainment in January raised $930 million from investors including GIC in Singapore and Saudi Arabia's Public Investment Fund. The envisioned partnership between Kakao, Kakao Entertainment and SM would cover global distribution, production and more for music and other content.
Following Kakao's offer, SM Shares rallied 14% to 148,400 won ; they have nearly doubled since the start of the year. Shareholders can look forward to this high-note ending.
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