HYBE looking to acquire an additional 25% stake in SM Entertainment for 900 million USD
the largest shareholder of SM, HYBE also decided to make a tender offer to SM's minority shareholders. With both companies at the top of the industry, attention is being focused on whether the Fair Trade Commission will approve the offer after their review.
According to the Financial Supervisory Service's electronic disclosure released on February 10, HYBE signed a contract to acquire 3,523,420 shares of SM Entertainment from Lee Soo Man at 422.8 billion KRW by March 6. This means HYBE will purchase the shares at a price of 120,000 KRW per share. The stock to be acquired by HYBE is a 14.9% stake in SM Entertainment . It is just below the Fair Trade Commission's corporate merger notification standard . Of the 18.6% stake held by Lee Soo Man, only the shares that are not legally problematic will be handed over to HYBE first. The rest of the shares will be transferred by the former executive producer exercising a put option after the Fair Trade Commission approval is secured.
Additional shares required for the acquisition of management rights will be secured through a tender offer. In a HYBE revealed its intention to purchase an additional 25.2% of SM's shares for a total of 1.14 trillion KRW from the minority shareholders. The purchase price per share will also be 120,000 KRW per share, which is a 22% premium over theAs a result, HYBE plans to secure a total of 43.7% of SM Entertainment's shares.
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