HYBE confirms to Korea Exchange they are considering acquiring stake in SME

In light of all the turmoil surrounding SM Entertainment at the moment, with an apparent coup underway and founder Lee Soo Man suing to stop Kakao’s investment in the company, it has been rumored that HYBE had been planning to step in themselves

For the confused. The rumor is that recently (as opposed to the 2020 rumor) Hybe was considering helping LSM maintain control of SM and upon hearing this, the current SM management contacted Kakao and agreed to issue them new shares at around 91K-92K per share https://t.co/wfRPyDLF9T

— TMIKpop (@tmikpop) February 8, 2023

As such, the Korea Exchange wanted clarification from HYBE, and they recently confirmed their interest.

“We are continuously reviewing matters related to purchasing SM Entertainment shares through the open market as well as acquiring shares. At this time, there are no confirmed matters.”

The label then stated that it would, “Release another announcement after reviewing the matters related to (the purchase) in detail, or within a month.”

This would be in support of Lee Soo Man (though obviously in favorable terms to themselves), as it would help him maintain relevance with the company, and so now this has truly turned into a conglomerate power struggle.

It is interpreted that the idea behind a Hybe tender offer was that if LSM handed his stake over to an investor that would further grow the company and that would allow LSM to continue to participate in management, he could gain a justification to persuade minority shareholders

— TMIKpop (@tmikpop) February 8, 2023

Basically, Lee Soo Man did not want to go in this direction with HYBE before, but now that a coup is underway, he’s seeing the light.

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For whatever reason, HYBE fans (lol) and some SME fans (again, lol) are confused by this. But much like fandoms of groups who hate each other, it means little to the actual groups themselves, and corporations give even less of shit. HYBE is effectively taking advantage of Lee Soo Man’s leverage collapsing and stepping in here to get a deal they wanted before, and it also stops a potential link up between Kakao and SME that could rival their position in the market. Not to mention Bang Si Hyuk has a class solidarity with LSM of sorts as founders who surely don’t want a trend of activist funds diluting shares and kicking them out of their own companies.

Anyway, still a long way to go and nothing is even official yet, but things are getting messier at an impressive rate.