South Korean entertainment company Hyebye has canceled its takeover bid for SM Entertainment.
The K-pop agency behind groups like BTS , LE SSERAFIM , SEVENTEEN , and NewJeans announced the decision in a statement Sunday after discussions with SM Entertainment and rival Kakao Corporation .
Haibei said it decided to halt the acquisition of SM after the market witnessed a tightening with competition from Kakao and Kakao Entertainment, adding that it "could have a negative impact on Haibei's stock value. "
Haibei initially tried to buy the shares from SM Entertainment founder Lee Soo Man, but now " with the increasing competition between Kakao and Kakao Entertainment, the company has decided that SM's purchase price is out of the acceptable price range."
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Haibe said he and Kakao "agreed to cooperate on platform-related issues" during the upcoming talks.
After the completion of the acquisition of Hyebe, SM Entertainment issued its own statement saying that it will promote the "3.0" business strategy.
These latest developments come after internet giant Kakao and its subsidiary, Kakao Entertainment, offered nearly $1 billion to buy up to 35% of SM Entertainment , making it the biggest shareholder in the hit K-pop company with a 40% stake.
Haibei has completed the acquisition of Lee So-Man's shares and an additional 0.98% through minority shareholders, giving him an existing 15% stake in SM Entertainment, down from the planned 25% stake .
SM Entertainment was quick to express its outrage over the attempted takeover of Hyebe, with company executives releasing a video describing it as a "hostile invasion" . Lee So-man's nephew, assistant manager Chris Lee, accused his uncle for years of foreign tax evasion and interference in the company's music production for personal and financial interests.
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