HYBE will dispose of all of its holdings by participating in the tender offer of SM Entertainment by Kakao.
HYBE announced earlier today that it would dispose of the entire 3,757,327 shares of SM for about 564 billion KRW (~ $437 million USD). Converted to the price per share, it is 150,000 won, the same as the bid price suggested by Kakao.
Previously, HYBE purchased SM shares at 120,000 won per share through a stock purchase agreement (SPA) and a tender offer signed with Lee Soo Man, former executive producer of SM.
Afterward, HYBE competed with Kakao for the management rights of SM, but on March 12th, they gave up the competition for shares and agreed to enter into a cooperative relationship with Kakao.
HYBE announced the purpose of the disposal, saying, “As the issuing company withdrew its acquisition of management rights, we decided to sell some or all of its shares after participating in a tender offer.”
If the tender offer is successful, HYBE can earn a profit of about 112.7 billion won (~ $87.4 million USD)., but a difference may occur if the stocks submitted for the tender offer exceed Kakao’s maximum planned purchase amount of 8,338,641 shares.
This is because Kakao decided to allocate the purchase volume in a proportional manner and not buy the excess if the amount of the tender offer exceeds the target amount.
Source:(A)
