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HYBE to offload final 9.66% stake in SM Entertainment to Tencent Music

The 243 billion KRW transaction is part of HYBE’s strategy to refocus on its core business ahead of BTS’s post-military comeback.

The logo of Tencent is seen at Tencent office in Shanghai, China December 13, 2021. REUTERS/Aly Song/File Photo
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Hybe to sell entire stake in SM Entertainment to China's Tencent - 1

Overview

  • HYBE will sell 2.2 million SM Entertainment shares at 110,000 KRW each, representing 9.66% of the company and totaling 243 billion KRW.
  • The sale price is about 15% below SM’s current market value, even as its stock has climbed roughly 20% over the past month.
  • The block deal is set to close on May 30, after which Tencent Music will become SM Entertainment’s second-largest shareholder, behind Kakao.
  • HYBE first acquired a 14.8% stake in SM during a 2023 control battle with Kakao but has since divested non-core assets.
  • HYBE says the divestment will allow it to concentrate on growth initiatives, including the anticipated return of BTS members from military service.