SM Entertainment seeks support from minor shareholders in Hybe takeover bid

• Published date: 01 March 2023
• Publication title: The Korea Times

SM Entertainment, a Korean agency behind several K-pop stars, has asked its minority shareholders for their support ahead of a shareholders meeting scheduled in light of a recent takeover bid by its industrial rival Hybe.

According to industry sources Wednesday, SM has sent letters to small shareholders pledging a dividend payout of 1,200 won ($0.90) per share. SM has planned a shareholders' meeting for March 31.

On the cover were the words "SM board recommendations" in a circle, and a red "X" over the words "Proposals by former major shareholder Lee Soo-man," referring to SM's founder.

Hybe, the K-pop powerhouse best known for producing global sensation BTS, became the largest shareholder of SM on Feb. 22, acquiring a 14.8 percent stake from Lee, who had an 18.46 percent share in his namesake company.

His remaining stake is also scheduled to be transferred to Hybe this year, as the deal included a put option that gives Lee the right to sell the remaining shares at a specific price within a month from either the time when the business combination is approved or the day when the deal is sealed.

In its letter to minor shareholders, SM called the ongoing saga "a critical turn of events that will never happen again in the Korean entertainment industry."

"Your decisions will affect the future of our company in a big way," the letter read. "This year's shareholders' meeting is the last opportunity for us to elevate our...