HYBE Is Reportedly Considering Striking Back After Kakao Begins Purchasing Even More Shares Of SM Entertainment

HYBE is reportedly considering purchasing even more shares after Kakao revealed its plans to become SM Entertainment‘s largest shareholder.

On March 7, it was reported that Kakao plans on becoming SM Entertainment’s largest shareholder by purchasing up to 35% of SM Entertainment’s shares on the open market.

According to reports, Kakao plans on purchasing the shares at a price of ₩150,000 KRW (about $116 USD), which is 25% higher than the ₩120,000 KRW (about $92.40 USD) HYBE paid for its shares in their acquisition last month.

Kakao Reportedly Plans On Becoming The Largest Shareholder In SM Entertainment

According to reports on March 7, HYBE is considering purchasing stock on the open market at a price of ₩180,000 KRW (about $139 USD) per stock, which is 20% higher than the ₩150,000 KRW (about $116 USD) Kakao is planning on paying per stock. The report states that HYBE plans on securing 25% of SM Entertainment through the public market.

Although many insiders felt it would be difficult for HYBE to counter Kakao’s additional purchase, according to reports, HYBE will be able to muster up enough resources for the acquisition. Worth noting are reports stating that HYBE recently contacted Morgan Stanley as it looks to attract up to a reported ₩1.00 trillion KRW (about $770 million USD) in new investments.

If HYBE is to purchase a 25% stake in the company at a price of ₩150,000 KRW (about $116 USD) per share, the company would need to pay an additional ₩1.07 trillion KRW (about $825 million USD). This is ₩357 billion KRW (about $275 million USD) more expensive than the original acquisition plan revealed on February 10.