Bang Si Hyuk has discussed HYBE's withdrawal from its acquisition of SM Entertainment and BTS's future as a group, specifically their individual military enlistments.
Here's what he said.
Bang Si Hyuk Acknowledges HYBE's Acquisition Withdrawal From SM Entertainment
On March 15, Bang Si Hyuk elaborated HYBE's conflict with Kakao, acquisition cancellation, BTS's military enlistments, and return from hiatus.
Initially, on February 10, It was reported that HYBE secured a 14.8 percent (3,523,420) stake from Lee Soo Man, the founder of SM Entertainment. Upon acquiring his portion, HYBE became SM Entertainment's largest shareholder.
The agreement made was a response to Kakao's plan of acquiring 9.05 percent take from SM Entertainment, through the purchase of convertible bonds and newly issued shares. Lee Soo Man was against with this, due to being "unlawful," according to the founder.
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On January 7, Lee Soo Man filed legal action against the accompany for this illegal practice. According to a legal representative from Hwawoo, it was reported that both Kakao and SM Entertainment went through unlawful acts to acquire shares, which went directly to Kakao.
Since SM Entertainment banned the share issuance and convertible bonds to Kakao, it instead planned to purchase shares from its existing stockholders. On March 7, Kakao made a new tender offer to SM Entertainment, which surpassed HYBE's original offer.
READ MORE: Lee Soo Man Reportedly Suing SM Entertainment For Unlawful Practices
Kakao's tender offer aims to acquire a 35 percent stake in SM Entertainment. It included 150,000 won per share (around $115). This is higher than HYBE's 120,000 won (approximately $92) to obtain a 25 percent stake.
HYBE's tender offer ended with a 1 percent additional shares acquisition. Media outlets reported that if Kakao's offer was to be granted, they will immediately become SM's largest shareholder, garnering 39.9 percent of overall shares.
On March 12, HYBE cancelled its acquisition process of SM Entertainment. The decision was made after the company noticed the market's overheating, because of its competition with Kakao and Kakao Entertainment.
Following the withdrawal, on March 10, Bang Si Hyuk stated there were no regrets about the decision to withdraw. He also revealed that HYBE had already been considering its acquisition since 2019. Bang Si Hyuk then shared his exchanges with Lee Soo Man.
"We were rejected back then when we have already offered twice. Lee Soo Man asked my intention for the shares acquisition through phone call."
"While there were short internal differences, I believed the factors that resisted our acquisition initially have faded away. This made me consider our takeover."
Bang Si Hyuk also explained how the acquisition attempts were taken negatively. The chairman described the actions weren't "HYBE-like." He also added his interaction with Lee Soo Man, who questioned his reluctance, and congratulated BoA for her 20th anniversary concert.
The chairman also clarified that he never saw the company feud as a war, since the main goal was to instill happiness to the K-pop community.
"We felt that we overstepped values and that's when the problems arose. Our choice will always be 'HYBE-like,' to not make our artists 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 held her 20th anniversary concert. Even though companies have a huge role in flourish K-pop, the credit majorly goes to the artists who shaped the industry."
"As someone who's involved in management, I feel apologetic. The core goal of all these is for the happiness of both fans and artists. I sincerely apologize."
Bang Si Hyuk Addresses BTS' Military Enlistments, Contract Renewals, More
Afterwards, Bang Si Hyuk discussed BTS, who went an indefinite hiatus from group endeavors to focus on their solo careers. The chairman shared that in 2025, HYBE and BTS will possibly return to their normal workflow.
Bang Si Hyuk clarified there wasn't much he could say about the group's military enlistment, since these are considered confidential.
He added HYBE will announce the dates when finalized. The questions led to BTS's contract renewals, to which HYBE will engage discussions with BTS when the right time arrives.
"HYBE and BTS 'hopes' to be able to continue group activities around 2025. On that note, I sincerely hope you won't consider this to be the goal year. But HYBE and BTS will give it our all."
"I talk cautiously about these issues since, as you are aware, a contract renewal for an organization with the size of BTS can largely impact society."
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