Bang Si Hyuk discussed HYBE’s withdrawal from the SM Entertainment acquisition and BTS’s future as a group, specifically their individual military enlistments.
Here’s what he said.
Bang Si Hyuk confirms HYBE’s withdrawal from SM Entertainment
On March 15, Bang Si Hyuk discussed HYBE’s conflict with Kakao, the cancellation of the takeover, BTS’ military enlistment, and returning from hiatus.
Initially, on February 10, it was reported that HYBE had acquired 14.8 percent (3,523,420) shares from Lee Soo Man, the founder of SM Entertainment. After taking over its part, HYBE became the largest shareholder of SM Entertainment.
The concluded agreement was a response to Kakao’s plan to take over 9.05 percent. shares in SM Entertainment by purchasing convertible bonds and new issue shares. Lee Soo Man was against it because it was “illegal” according to the founder.
(Image credit: Twitter, SM Entertainment)
(Image credit: Kakao Entertainment (News1))
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On January 7, Lee Soo Man filed a lawsuit against the escort for this illegal practice. According to Hwawoo’s legal representative, both Kakao and SM Entertainment were reported to have engaged in unlawful activities to acquire shares that went directly to Kakao.
Since SM Entertainment had banned the issuance of shares and convertible bonds to Kakao, it planned to purchase shares from its existing shareholders instead. On March 7, Kakao submitted a new bid to SM Entertainment that surpassed HYBE’s original bid.
READ MORE: Lee Soo Man is allegedly suing SM Entertainment for unlawful practices
Kakao’s tender offer is aimed at acquiring 35 percent. shares in S.M. Entertainment. It was 150,000 won per share (about US$115). That’s more than HYBE’s 120,000 won (about $92) for getting a 25 percent share.
HYBE’s tender offer resulted in the acquisition of an additional 1 percent. shares. The media reported that if Kakao’s offer is accepted, they will immediately become the largest shareholder of SM, gaining 39.9 percent. total number of shares.
On March 12, HYBE canceled the acquisition of SM Entertainment. The decision was made after the company noticed an overheating of the market caused by competition from Kakao and Kakao Entertainment.
After withdrawing on March 10, Bang Si Hyuk stated that he did not regret his decision to withdraw. He also revealed that HYBE had been considering an acquisition since 2019. Bang Si Hyuk then shared his trades with Lee Soo Man.
“We were turned down at the time when we had already made an offer twice. Lee Soo Man inquired by phone about my intention to purchase shares.
“While there were brief internal differences, I believed that the factors that initially resisted our acquisition had vanished. This prompted me to consider our acquisition.”
(Image credit: Bang Si Hyuk (News1))
Bang Si Hyuk also explained how the takeover attempts were received negatively. The chairman described activities that were not “HYBE-like”. He also added his interaction with Lee Soo Man, who questioned his reluctance and congratulated BoA on her 20th anniversary concert.
The CEO also explained that he never saw the company dispute as a war as the main goal was to instill happiness in the K-pop community.
“We felt we had exceeded the limits and that’s when the problems started. Our choice will always be ‘HYBE’ so our artists don’t feel ashamed.”
“All he (Lee Soo Man) said was, ‘Why stop when you can win? and I wasn’t sure if he was disappointed.”
“I want to congratulate BoA who just hosted her 20th anniversary concert.
“As someone who does management, I apologize. The main goal of all this is the happiness of both fans and artists. I sincerely apologize.”
Bang Si Hyuk refers to BTS’s military enlistments, contract renewals, and more
Bang Si Hyuk then talked about BTS taking an indefinite hiatus from their group efforts to focus on their solo careers. The chairman said that in 2025, HYBE and BTS will probably return to normal operation.
(Photo: Website: TIME)
Bang Si Hyuk explained that he couldn’t say much about the group’s military enlistment because they are considered confidential.
He added that HYBE would announce dates once finalized. The questions led to BTS contract renewal, which HYBE will enter into talks with BTS when the time is right.
“HYBE and BTS are ‘hoping’ that we can continue group activities around 2025. With that in mind, I sincerely hope you don’t make this year a goal. But HYBE and BTS will give it their best.”
“I speak about these issues with caution because, as you know, renewing a contract for an organization the size of BTS can make a big difference to society.”
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Written by Israel Monte