South Korean leisure big HYBE is promoting its complete 9.38% stake in rival Ok-Pop agency SM Leisure.
The client is Tencent Music Leisure, China’s largest proprietor of music streaming companies, which is buying the two.21 million shares in SM Leisure held by HYBE in a transaction price 243.35 billion South Korean gained ($177m at present alternate charges).
SM Leisure is the corporate behind distinguished Ok-pop acts like Tremendous Junior, EXO, Women’ Era, Purple Velvet, aespa, NCT, and Riize.
TME operates platforms together with QQ Music, Kugou Music, Kuwo Music, and WeSing.
HYBE disclosed the share sale in a regulatory submitting on Tuesday (Could 27), which reveals that TME is shopping for the shares at 110,000 South Korean gained (roughly $80) every.
HYBE mentioned that the shares “shall be disposed of by way of after-hours block buying and selling after the market closes on Could 30, 2025”.
South Korea’s Yonhap information company cites HYBE as saying that it has “divested non-core property as a part of a selection and focus technique,” with the corporate including that the “Secured funds shall be used to safe future progress engines”.
Yonhap reviews that SM Leisure mentioned that the corporate plans to “work extra intently with Tencent Music” following the share sale.
SM Leisure was the topic of a flurry of music business media headlines in 2023, as rival HYBE made a hostile takeover play for the Korean firm. Ultimately, HYBE took management of a minority stake in SM.
Following the most recent transaction introduced this week, Tencent Music will turn into the second-largest shareholder in SM Leisure, as HYBE exits its place within the rival Ok-Pop firm.
The biggest non-public stakeholder in SM Leisure is Kakao (and subsidiary, Kakao Leisure), which collectively maintain a mixed 40.28% stake in SM Leisure (see beneath).
Tencent Music’s vital funding in a South Korean music firm arrives alongside reviews that TME’s residence market of China is ready to raise a ban on South Korean cultural and leisure content material imports.
The de facto distribution ban was imposed by China in 2017 in retaliation for the deployment of a U.S. missile system in South Korea.
Improved relations between the 2 international locations might end in a considerable uplift in live performance ticket, album, and merch gross sales for South Korean corporations as they broaden past their residence market amid the continued rise in Ok-pop’s international recognition.
Tencent Music’s funding alerts a vote of confidence in South Korean Leisure’s future positioning within the Chinese language market, the world’s fifth-largest recorded music market in response to the IFPI.
Yonhap factors out that Tencent Music father or mother Tencent Holdings additionally owns stakes in different Ok-pop labels, like YG Leisure (a 4.3% stake) and Kakao Leisure (a 4.61% stake).
One other signal of strengthening ties between China-headquartered DSPs and South Korean music corporations arrived simply yesterday (Monday, Could 26). South Korea’s RBW Inc., a content material manufacturing firm and residential to Ok-POP acts resembling MAMAMOO, ONEUS, ONEWE, and PURPLE KISS, has struck a strategic copyright partnership with Tencent Music rival NetEase Cloud Music.
Based on the announcement about RBW’s NetEase deal, the “alliance goes past standard music distribution, aiming to foster deeper business cooperation and cultural alternate between Korea and China”.
HYBE initially acquired a 14.8% stake in SM from SM’s founder and former Chief Producer Lee Soo Man in February 2023 in a deal price roughly USD $335 million.
After HYBE acquired that 14.8% stake in SM from the latter firm’s founder in February 2023, it revealed that it deliberate to amass an extra 25.2% of SM Leisure’s shares – which might have taken HYBE’s complete shareholding as much as 40% – by way of a young supply to SM’s minority shareholders.
HYBE’s takeover plan fell quick, nevertheless, solely managing to amass an further 0.98% stake in SM Leisure, elevating its possession to 15.78% (together with the 14.8% stake acquired in February 2023).
Kakao / Kakao Leisure then launched its personal tender supply for SM shareholders at a better per-share value than HYBE’s bid.
Kakao had already agreed a deal to purchase 9.05% of SM in February 2023, by way of the acquisition of bonds and newly-issued shares. Nevertheless, Lee Soo Man efficiently blocked this buyout try in a Seoul court docket by way of an injunction.
HYBE’s try to purchase a 40% stake in SM was met with sturdy resistance from SM’s administration. On March 12, 2023, HYBE ended its takeover try of SM.
By the tip of March 2023, Kakao Corp. formally turned the biggest shareholder in SM Leisure, rising its stake in SM to 39.87% from the earlier 4.9% after finishing its tender supply for shares within the company.
HYBE had initially deliberate to divest its complete 15.78% stake in SM, however remained a shareholder of SM with an 8.81% stake.
HYBE then upped its stake in stake in SM to round 12.6% in March 2024, when it acquired 869,948 shares in SM Leisure from SM’s founder and former Chief Producer Lee Soo Man.
HYBE bought a 3.2% stake in SM Leisure in Could final 12 months, decreasing its shareholding to 9.38%, which is now being bought to Tencent Music Leisure.
HYBE printed its Q1 outcomes just lately, posting a 38.7% YoY bounce in income to KRW 500.6 billion ($358.5m), a 50.3% YoY enhance in working revenue to KRW 21.6 billion ($15.5m), and a 398% YoY bounce in web revenue to KRW 55.3 billion ($39.6m).
SM Leisure Group reported a 5.2% YoY bounce in group income for the primary quarter of 2025, pushed by elevated music and live performance income.
Based on TME’s newest earnings report, the corporate’s complete variety of paying customers elevated by 8.3% YoY to 122.9 million in Q1 2025, up by 1.9 million versus the prior quarter of This fall 2024.Music Enterprise Worldwide
