Kakao and HYBE decided to stop competing to buy SM Entertainment because they thought this race would not help them both.

According to the financial industry on March 11th, Kakao, and HYBE reached an agreement on March 10th. The two have been competing to become the largest shareholder of SM Entertainment before the shareholder meeting on Mach 31st. The details of the agreement are yet to be known but it was reported the two have settled that not one of them should become the single largest shareholder.

Meanwhile, Kakao and HYBE have been playing a chicken game over SM Entertainment’s stocks. When HYBE failed to acquire 25% of SM’s shares, Kakao announced on March 7th that it will be offering to purchase 35% of shares of SM Entertainment at 150,000 KRW (114.45 USD) until March 26th.

It seems they both have settled after concluding this type of race does not help either one of them. The industry warned of the winner’s curse and the Financial Supervisory Service is keeping a close eye on their deals to ensure there was no market manipulation in tender offers. Additionally, criticisms of these labels that they are neglecting K-Pop fans’ concerns arose.

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