It’s official: HYBE has inked a deal with SM Entertainment founder Lee Soo Man that will make it the largest shareholder of the company.
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On February 10, HYBE was officially confirmed to be acquiring a 14.8 percent stake of SM Entertainment from Lee Soo Man for 422.8 billion won (approximately $334.3 million).
Before the deal, Lee Soo Man possessed an 18.46 percent stake in SM Entertainment, making him the company’s top shareholder. Earlier this week, Kakao became the second-largest shareholder after acquiring a 9.05 percent stake in the company: a move that Lee Soo Man denounced as illegal—and against which he is taking legal action.
Last week, SM Entertainment’s current CEO Lee Sung Soo (who is Lee Soo Man’s nephew) and COO Tak Young Jun announced their vision for a newly restructured “SM 3.0,” which involved cutting ties with SM Entertainment’s longtime producer Lee Soo Man. A few days later, Kakao acquired its stake in the company. Lee Soo Man then flew back to Korea and declared that he would be taking legal action against SM Entertainment for violating the Commercial Act by illegally issuing new shares of the company and convertible bonds without the agreement of the top shareholder (Lee Soo Man) during a management dispute.
Outside of its deal with Lee Soo Man, HYBE has also announced that it plans to acquire additional shares of SM Entertainment from minority shareholders, which will further increase its stake in the company.