Top K-pop stocks fall on report Hybe may sell SM stake | Wilnesh News

Shares in South Korea’s two largest K-pop companies fell on Tuesday after industry giant Hybe was said to be pushing to sell its stake in SM Entertainment for $50 million.

Shares of Hybe, which is listed on Kospi, fell 2.4%, while shares of SM Entertainment, which is listed on Kosdaq, fell 5.74%.

Korean media Chosun Ilbo reported that Hybe — the agency that manages K-pop group BTS — intends to do the deal in a block trade of 750,000 shares.

The news outlet also stated that the sale was because Hybe believed that its shares “are a minority stake and have no impact on SM’s management rights. It is best to sell in large quantities and realize profits.”

According to Chosun Ilbo, the stock will be sold at a discount of 4% to 5.5% from SM’s latest closing price of 95,800 won. This puts the selling price per share between 91,968 won and 90,531 won.

This means that the total transaction value will reach approximately 68 billion won (approximately US$50 million). Before the transaction, Hybe held a 12.45% stake in SM.

CNBC reached out to SM Entertainment for comment but did not immediately receive a response.

In February last year, Hybe lost out to SM in a takeover bid from South Korean social media giant Kakao, which currently holds about 40% of the company’s shares.

The move also comes amid a long-running battle between Hybe and its sub-brand ADOR, which manages girl group NewJeans.

Since April 19, the last trading day before Hybe’s audit of ADOR, Hybe’s stock price has plummeted 13.66%.

Hybe is expected to succeed ADOR CEO Min Hee Jin at an extraordinary shareholder meeting on May 31 after she was accused of wanting to separate the brand. Hybe also called on Min to step down, according to a statement sent to CNBC on April 25.

Min has denied the accusations It also accused Hybe of copying the concept of ADOR girl group NewJeans and using it for another girl group owned by another subsidiary of Hybe.