Kakao on a Mission to Boost K-Culture: Launches Tender Offer to Grab 35% Stake in SM Entertainment

Kakao Corp and its subsidiary Kakao Entertainment started tendering an offer to purchase shares in SM Entertainment.

On March 7th, Kakao Corp and its subsidiary Kakao Entertainment explained, “The three companies signed a strategic business partnership, judging that each other is the best partner in order to have competitiveness comparable to large global entertainment companies and grow together. However, as the business partnership and the mid- to long-term growth direction of the three companies are currently threatened, Kakao judged that it is inevitable to secure the largest shareholder position in order to maintain a stable partnership with SM Entertainment.“

Accordingly, they announced that they will conduct a tender offer for SM Entertainment’s shares held by minority shareholders at 150,000 won per share. They said, “Kakao and Kakao Entertainment, which currently hold a 4.9% stake, intend to acquire an additional 35% stake through a tender offer to secure a total of 39.9%. Any SM Entertainment shareholder can participate in this tender offer, which runs from March 7th to 26th.“

They added, “We have strong trust in the outstanding competitiveness of SM Entertainment’s current management, executives, staff members and artists, and respect the current management’s efforts to resolve the factors that hinder SM Entertainment’s growth, as well as future visions and strategic directions, including SM 3.0. Even after becoming the largest shareholder, we plan to respect SM Entertainment’s originality and ensure independent operation. Based on this horizontal partnership, it is expected that the two companies will be able to create strong synergy to strengthen K-Culture’s competitiveness and enhance its global status.“

Source: Nate