[Stock Price Trend] Kakao Tender Buying KRW 150,000 for SM…
[Stock Price Trend] Kakao Tender Buying KRW 150,000 for SM…Hive and “Backfire”.
Kakao has decided to secure a stake of up to 35% by publicly buying SM Entertainment shares in the market. Hive, who joined hands with former general producer Lee Soo-man, secured only 0.98 percent more in the recent open purchase.
According to the financial investment industry on the 7th, Kakao and Kakao Entertainment will publicly purchase 8,333,641 shares of SM for 150,000 won per share from this day to the 26th.
This is 35% of SM shares, and Kakao and Kakao Entertainment plan to buy them in half. The total acquisition amount is 1.25 trillion won, and Korea Investment & Securities is the organizer of the tender offer.
Kakao’s open purchase price of 150,000 won is 25% higher than 120,000 won offered by Hive. It is 14.5% higher than SM’s closing price (130,100 won) the previous day.
Kakao’s public purchase is attributed to its failure to secure a 9.05% stake in SM through paid-in capital increase and convertible bonds.
SM’s current management held an emergency board meeting on the 7th of last month and decided to issue 111.9 billion won in new shares and 105.2 billion won in convertible bonds to Kakao in a third-party manner. However, Kakao’s plan was disrupted when the court cited an injunction filed by former general manager Lee Soo-man on the 3rd of this month.
The failure of Hive’s public purchase also seems to have affected Kakao’s decision. Hive announced the previous day that it has secured an additional 0.98% stake through the recent public purchase of shares to secure SM management rights.
Hive tried to publicly buy 25% of SM shares for 120,000 won per share for 20 days from the 10th of last month, but failed as SM shares exceeded 120,000 won.
The number of shares accepted the tender offer is 233,817 shares. Except for Galaxy SM, individuals have only participated in four weeks.
If former general manager Lee Soo-man’s 14.8% stake sold to Hive and the remaining 3.65% stake of Lee Soo-man, who has put options, are combined, Hive’s stake in SM is 19.43%.
The possibility cannot be ruled out that Hive will make an open purchase at a higher price against Kakao’s open purchase. Hive is said to have made every effort to secure voting rights to appoint the board members they recommended at SM’s shareholders’ meeting on the 31st.