Seoul – Asdaf News:
As investors wagered that BTS agency HYBE (352820.KS) would benefit from a significant restructuring of South Korea’s K-pop industry, driving up its earnings and giving it even more market sway, shares of HYBE rose 6.6% on Tuesday.
On Friday, HYBE made plans to purchase up to a 39.8% interest in SM Entertainment (041510.KQ). This comprises a previously agreed-upon 14.8% share from founder Lee Soo-man as well as 25% through a tender offer, only days after rival Kakao decided to purchase a 9.05% stake in SM.
The increase in the share price of HYBE surpassed the 0.57% increase in the whole market by a significant margin. As part of the agreement between HYBE and SM to transfer management rights, SM shares also increased by 0.95% after reaching a high of 119,000 won, getting close to the 120,000 won tender offer price.
As shares rose, SM surpassed rival K-pop agency JYP Entertainment in market capitalization, climbing to the ninth-largest firm listed on the more limited Kosdaq (.KQ11) index on Tuesday (035900.KQ).
Two of the biggest K-pop agencies are HYBE and SM, and observers predicted that the SM acquisition would further bolster HYBE’s dominance of the sector.
With artists like Girls’ Generation and EXO, SM, which was founded in 1995, was at the vanguard of taking K-pop international.
According to Jina Ahn, an analyst at eBest Investment & Securities, the agreement would increase HYBE’s roster of international musicians and provide it with a lineup of K-pop singers spanning many generations.
