Hybe has pulled out of its planned deal that would have secured 40% of K-pop entertainment company SM Entertainment.
Hybe (formerly Big Hit), which is home to acts including BTS, had become embroiled in a takeover battle with a domestic rival, the online and social media company Kakao Corp. Hybe has now withdrawn its bid in a stake of SM Entertainment, and said in a statement that the decision was down to the market “overheating”.
Kakao’s 1.25 trillion won ($956 million) bid for up to 35% of SM Entertainment represented an increase of 25% on the share price in Hybe’s purchase offer.
Hybe currently owns 15.8% of the shares, but its proposal to expand its stake to 40% did not receive shareholder support. Behind the scenes, SM Entertainment management had become estranged from founder Lee Soo-man, and last month CFO Jang Cheol Hyuk described the Hybe offer as a hostile takeover attempt.
SM is home to K-pop acts including NCT Dream, Girls' Generation, EXO, SHINee, and more.
Kakao Corp has recently acquired multiple content companies, while subsidiary Kakao Entertainment invested in Metaverse Ent to create virtual K-pop stars.
Kakao and SM Entertainment said they welcomed Hybe’s withdrawal from the bidding.
"Kakao and Kakao Entertainment will continue its tender offer bid until March 26 to secure a further stake and work on the details of business cooperation between Hybe and SM," said a statement.