On the 10th, HYBE announced its intention to purchase 14.8% of shares belonging to Lee Soo Man, the largest shareholder of SM Entertainment, for a sum of 422.8 billion won. Lee Soo Man’s stake in the company is 18.46%, higher than the 9.05% acquired by Kakao on the 7th. Additionally, HYBE declared its plan to launch a tender offer for the shares held by the minority shareholders of SM Entertainment.
Last week, Lee Sung Soo, the CEO of SM Entertainment, and Tak Young Jun, the COO, announced their plans for a revamped “SM 3.0” that involved cutting ties with the well-known producer Lee Soo Man.
A few days later, Kakao acquired a share in the company. This prompted Lee Soo Man to return to Korea and declare his intention to take legal action against SM Entertainment for breaking the Commercial Act. He claims that the company illegally issued new shares and convertible bonds during a management disagreement without getting the approval of the top shareholder, which is Lee Soo Man.
According to reports, on the morning of February 10th, Sung Soo Lee and Tak Young Jun, the co-CEOs of SM Entertainment, along with 25 other senior executives, released a statement regarding the legal action being taken by the company’s largest shareholder and rumors of a takeover by HYBE. The statement affirmed their opposition to any hostile takeover attempts from external sources.
They emphasized that the strategic alliance with Kakao was solely based on the decision to advance the implementation of the SM 3.0 strategy and had no connection to the management dispute claimed by the largest shareholder. The statement also expressed opposition to privatization attempts by certain shareholders or groups, and a commitment to establishing a transparent governance structure and safeguarding shareholder rights.