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On Wednesday, February 28, the Korean media outlet, SPOTVNews reported that Lee Soo-man had sold all his remaining shares of SM Entertainment to HYBE Labels. The founder and former CEO of SM Entertainment previously owned 868,948 shares of the agency, roughly amounting to 104.273 billion KRW.
Previously, during a bid between HYBE and Kakao on the acquisition of SM Entertainment, HYBE was reported to have acquired 14.8% of the entertainment agency's stake. Though HYBE only ended up earning 8.9% of the agency's stake at the end of the bid, the label granted a foot option (stock purchase rights), offering Lee Soo-man the option to sell his part of the shares at 120,000 won per share to HYBE Labels.
While the issue was put to rest after HYBE backed out from the bid, letting Kakao claim the management rights of SM Entertainment, it was recently revealed that HYBE will be earning all the remaining shares of Lee Soo-man with him acting upon the foot option. Therefore, HYBE's stake in SM Entertainment has once again gained 12.6%, and this stock acquisition is expected to take place on March 7.
As the news landed on the internet, fans expressed quite a mix of reactions to the news. While fans are upset and confused about Lee Soo-man having no ties with SM Entertainment, despite being the agency's founder, they are also intrigued about HYBE's acquisition of the K-pop powerhouses.
Fans divided as Lee Soo-man is reported to sell all his remaining shares of SM Entertainment to HYBE Labels
Back in early 2023, SM Entertainment was bid for acquisition by two parties, HYBE Labels and Kakao. Lee Soo-man initially sold his shares to HYBE to avoid Kakao's acquisition of the agency, and HYBE momentarily stood as the largest shareholder of SM Entertainment by gaining about 14.8% of its stake.
However, HYBE soon backed out of the bid after reaching an agreement with Kakao but still ended up with about 8.8% of the agency's shares.
Regardless, HYBE Labels also granted a foot option for the founder of SM Entertainment to sell all his remaining shares to them. This agreement was put forth on the condition that HYBE is expected to buy the shares at the same price as the stocks it acquired during the initial period of the deal. This meant that each share would be bought at a rate of 120,000 KRW.
Since SM Entertainment's shares are selling at much lower rates when compared to the time of the deal, at 79,500 KRW, HYBE Labels would be required to purchase the agency's shares at a much higher rate.
The stock acquisition is expected to happen on March 7, after which Lee Soo-man is expected to have zero shares with SM Entertainment. HYBE Labels, on the other hand, will stand with 12.6% shares of the entertainment agency.
This revelation naturally led to a mixed set of reactions landing on the internet. Several people were concerned about SM Entertainment's condition since the promoters themselves, such as Lee Soo-man, selling their shares of the company didn't stand as a good sign.
As netizens continued to anticipate the possible downfall of SM Entertainment, they also couldn't neglect HYBE Labels' role as the powerhouse of the K-pop industry. Several netizens expressed their worry about the record label acquiring and monopolizing the various aspects of the K-pop industry under its bracket.
