Latest news with #Hybe
Forbes
10 hours ago
- Business
- Forbes
Tencent Music Buys $177 Million Stake In K-Pop Giant SM Entertainment
SM Entertainment's K-pop girl group Aespa at a media showcase in Seoul, South Korea. Chinese billionaire Ma Huateng's tech giant Tencent is set to acquire a nearly 10% stake in K-pop agency SM Entertainment from billionaire Bang Si-hyuk's rival agency Hybe, as thawing relations between China and South Korea have signaled a potential rise in demand for Korean cultural exports. Tencent Music Entertainment Group, Tencent's online music arm, will purchase Hybe's 2.2 million shares in SM Entertainment for 243 billion won ($176.6 million), according to a Hybe corporate filing Tuesday. The shares, which Hybe will dispose of in an after-hours block trade on May 30, are priced at 110,000 won apiece, representing a discount of roughly 15% from their price of 130,000 won at Tuesday's market close. Upon the sale, Tencent Music will hold a 9.7% stake in SM Entertainment, making it the second-largest shareholder of the K-pop agency after billionaire Kim Beom-su's Kakao and its entertainment affiliate. The Korean internet giant owns a combined 41.5% stake in SM Entertainment, between Kakao Corp. (with 21.6%) and its subsidiary Kakao Entertainment (19.9%). Tencent also owns a 5.95% stake in Kakao Corp. Hybe stated in its filing that the purpose of its share sale is 'optimizing investment asset management efficiency.' Tencent Music and SM Entertainment did not immediately respond to a request for comment. 'Amid recent tariff turmoil, K-pop industry remains defensive and relatively insulated from direct tariff risks,' researchers from Global X, an ETF provider of Mirae Asset Global Investments, wrote in a monthly commentary report published last Tuesday. 'Furthermore, the sector stands to gain from improving Korea-China relations, as the potential reopen of China market could unlock significant growth opportunities.' Other factors, including the comeback of leading artists and the rise of new ones, could also play a role in improving the industry's fundamentals, the researchers added. SM Entertainment, in particular, may expect to benefit from 'upcoming releases from key artists such as Aespa, NCT WISH, and RIIZE.' Hybe's world-record-shattering boy band BTS, which has scored six No. 1 albums on the U.S. Billboard 200, may reunite as early as this June upon the seven members' completion of their mandatory military service. Hybe's K-pop boy group BTS attending the 64th Annual Grammy Awards. Tencent Music's latest investment aligns with rising hopes across the entertainment industry that Beijing may lift its unofficial ban on K-pop performances. Following Seoul's 2016 decision permitting the U.S. military to deploy a missile defense system in South Korean airspace, regulators effectively barred K-pop concerts from taking place in mainland China, while also restricting streaming platforms from releasing Korean-language TV shows and movies. The first sign of detente came in late April, when Epex, a K-pop boy band managed by C9 Entertainment, announced on April 30 it would perform a concert in Fuzhou, the capital city of China's southeastern province of Fujian. But less than two weeks later, on May 10, the concert was indefinitely postponed, with C9 Entertainment citing unspecified 'issues' in the region. Reopening China's borders to concerts and other live performances would be a boon to major K-pop agencies, which rely on ticket and merchandise sales as key revenue streams. SM Entertainment reported its revenue reached 231.4 billion won in the first quarter, with concert revenue rising 58% year-over-year to 39 billion won. Another source of revenue for K-pop agencies is capitalizing on fan engagement, chiefly through apps that offer paid subscriptions for fans to directly message celebrities or join exclusive livestreams. Tencent announced last October it would partner with an SM Entertainment subsidiary, DearU, to launch its fan engagement app, Bubble, in China. Slated to enter the market by June, Bubble may face steep competition from other popular apps like Hybe's Weverse, which announced in April that it reached 9.4 million monthly active users and 150 million cumulative downloads by the end of 2024. The share purchase marks Tencent's solidified role among Korea's leading 'Big 4' music agencies—Hybe, JYP Entertainment, SM Entertainment and YG Entertainment—with each agency distinguished by a handful of marquee acts. Tencent Music owns a 4.3% stake in YG Entertainment, known for its landmark girl group Blackpink, which made the 30 Under 30 Asia list in 2019; JYP's artists include girl group Twice, which made the list in 2020, and boy group Stray Kids, which made the list this year.
Korea Herald
15 hours ago
- Business
- Korea Herald
Hybe founder Bang probed over IPO flaws
Bang Si-hyuk, founder and chairman of the K-pop powerhouse Hybe, has been under investigation over charges that he intentionally misled investors ahead of the company's stock market debut, industry sources said Wednesday. According to the sources, the Financial Supervisory Service (FSS), the country's financial watchdog, has been probing Bang on speculation that he had sought to list Hybe on the stock market while stressing that there was no plan for Hybe's initial public offering (IPO). The sources said Bang signed a deal with private equity funds in 2020 to share a portion of the gains from the Hybe's IPO, and the Hybe chairman received some 400 billion won (US$291.3 million). But in 2019, Bang said to investors that Hybe's stock market listing was impossible while applying for a designated external auditor for its IPO, according to the sources. Hybe, listed on the Korean stock market in October 2020, closed at 265,000 won Wednesday, down 7.33 percent from the previous session's close. (Yonhap)
Korea Herald
21 hours ago
- Business
- Korea Herald
Tencent becomes SM's No. 2 shareholder
Hybe sells full stake to Tencent unit in W243b block deal Hybe is selling its entire stake in SM Entertainment to Tencent, positioning the Chinese tech giant as the K-pop agency's second-largest shareholder and ending a fraught chapter between the two rivals. According to a regulatory filing Tuesday, Hybe will offload about 2.21 million shares to Tencent Music Entertainment Hong Kong, a Tencent subsidiary, via an off-hours block trade Friday. The shares are priced at 110,000 won each, valuing the deal at roughly 243.35 billion won ($176.7 million). Tencent will replace Hybe as SM's second-largest shareholder with a 9.66 percent stake. Korean IT giant Kakao remains the largest shareholder, with 41.5 percent through itself and its content arm, Kakao Entertainment. Hybe said the divestment is part of efforts to streamline its portfolio and enhance investment efficiency. 'We are streamlining noncore assets to focus on our main business,' the company said. 'Proceeds from the sale will be used to drive future growth initiatives.' The deal also marks the end of an uneasy alliance stemming from Hybe's failed takeover attempt of SM. In early 2023, Hybe bought a 15.78 percent stake, including 14.8 percent from founder Lee Soo-man, amid an ownership battle between Lee and SM executives. Despite investing about 550 billion won in its bid, Hybe was ultimately outmaneuvered by Kakao. Hybe has since trimmed its holdings and is now exiting at a modest gain, according to reports. Analysts see Tencent's entry as a potential tailwind for SM. 'SM shares have been stuck in the 120,000 won range due to overhang concerns (from Hybe's stake), and it's positive that this risk is being removed,' said Jie In-hae, an analyst at Shinhan Securities, who raised her target price for SM to 160,000 won from 130,000 won. Tencent's backing could also reinforce SM's activities in China, as expectations grow over a potential easing of Beijing's tacit ban on Korean pop culture. Tencent already holds stakes of about 6 percent in Kakao and 4 percent in Kakao Entertainment through subsidiaries, and has longstanding ties with Korean labels through distribution and investment. 'With its new stake in SM, Tencent is likely to strengthen collaboration among the entertainment companies it has invested in,' said Choi Min-ha, an analyst at Samsung Securities. 'Once the Chinese market reopens, SM could be one of the biggest beneficiaries.'
Business Times
a day ago
- Business
- Business Times
Tencent Music buys SM Entertainment stake in K-pop bet
[SEOUL] A Tencent Holdings subsidiary is snapping up a nearly 10 per cent stake in SM Entertainment valued at about US$180 million, marking a rare Chinese investment into a South Korean company in recent years. Tencent Music Entertainment Group, which is controlled by Tencent, will buy the stake from BTS agency Hybe, which is selling its remaining 2.2 million shares in SM Entertainment at 110,000 won each, a 15.3 per cent discount to Tuesday's (May 27) close, according to a regulatory filing. The move comes as China is widely expected to lift its nearly decade-old unofficial ban on K-pop performances in mainland China. That potentially opens South Korean companies such as SM Entertainment to resume music distribution through the relationship with Tencent. Before the restrictions, China was among the fast-growing markets for K-pop. China imposed the so-called 'K-wave ban' in 2016 in retaliation for South Korea allowing the US military to deploy missile defence system called Thaad, or Terminal High-Altitude Area Defense, on its soil. Tencent, China's gaming and social media leader, was not available for an immediate comment. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up For Tencent, the deal would mark its first major investment in South Korea's music industry in years. It owns a 4.3 per cent stake in YG Entertainment and a 5.95 per cent holding in Kakao, South Korea's biggest Internet company which is also the largest shareholder of SM Entertainment. The selldown will bring an end to the bitter battle for the control of SM Entertainment. Hybe and Kakao sought to buy SM Entertainment in 2023, in what would have been one of the country's biggest media sector deals. But Hybe dropped its pursuit of SM after the bidding war pushed up the SM stock price, making it too expensive. The deal also resulted in Kakao founder Brian Kim getting caught up in the regulatory crosshairs, over charges that he allegedly tried to manipulate the SM Entertainment shares. Kim has repeatedly denied any wrongdoing. South Korean entertainment stocks have been among the biggest gainers in the Korean equity market this year, driven by expectations they will be shielded from tariff wars. The rally is also underpinned by expectations of China lifting its K-pop ban. SM Entertainment shares have rallied 72 per cent so far this year while YG Entertainment jumped 77 per cent. Hybe said in a statement it divested non-core assets and the proceeds will be used to fund future growth. BLOOMBERG
Malaysian Reserve
2 days ago
- Business
- Malaysian Reserve
Tencent increases Korea music exposure ahead of China K-Pop move
TENCENT Holdings Ltd. is snapping up a nearly 10% stake in SM Entertainment Co. Ltd valued at about $180 million, marking a rare Chinese investment into a South Korean company in recent years. Tencent will buy the stake from BTS-agency Hybe Co Ltd., which is selling its remaining 2.2 million shares in SM Entertainment at 110,000 won each, a 15.3% discount to Tuesday's close, according to a regulatory filing. The move comes as China is widely expected to lift its nearly decade old unofficial ban on K-pop performances in mainland China. That potentially opens South Korean companies such as SM Entertainment to resume music distribution through the relationship with Tencent. Before the restrictions, China was among the fast growing markets for K-pop. China imposed the so-called 'K-wave ban' in 2016 in retaliation for South Korea allowing the US military to deploy missile defence system called Thaad, or Terminal High-Altitude Area Defense, in its soil. Tencent, China's gaming and social media leader, was not available for an immediate comment. For Tencent, the deal would mark its first major investment in South Korea's music industry in years. It owns a 4.3% stake in YG Entertainment Inc. and a 5.95% holding in Kakao Corp., South Korea's biggest Internet company which is also the largest shareholder of SM Entertainment. The selldown will bring an end to the bitter battle for the control of SM Entertainment. Hybe and Kakao Corp sought to buy SM Entertainment in 2023, in what would have been one of the country's biggest media sector deals. But Hybe dropped its pursuit of SM after the bidding war pushed up the SM stock price and making it too expensive. The deal also resulted in Kakao founder Brian Kim getting caught up in the regulatory cross hairs, over charges that he allegedly tried to manipulate the SM Entertainment shares. Kim has repeatedly denied any wrongdoing. South Korean entertainment stocks have been among the biggest gainers in the Korean equity market this year, driven by expectations they will be shielded from tariff wars. The rally is also underpinned by expectations of China lifting its K-pop ban. SM Entertainment shares have rallied 72% so far this year while YG Entertainment Inc. jumped 77%. Hybe said in a statement it divested non-core assets and the proceeds will be used to fund future growth. –BLOOMBERG
