“Good songs will go to BTS, TXT and NewJeans first,” SM expresses his concern about HYBE
SM Entertainment, which is fighting for management rights with HYBE Labels, is drawing attention to itself with a letter of concern to the shareholders.
Recently, prior to the SM shareholders’ meeting, a letter was sent to the minority shareholders by the current board of directors of SM Entertainment, who are fighting for management rights against HYBE Labels.
In that letter, SM’s current management argued that if HYBE acquires SM, the right songs as well as other resources will be given priority to HYBE artists such as BTS, TXT or NewJeans.
Overall, they are concerned that SM artists will be less of a priority.
HYBE labels are known to own ADOR, the agency of NewJeans, and Source Music, the agency of LE SSERAFIM, and other related companies.
SM also claimed that “Good apprentices, good songs, good choreographers and good performance plans will be awarded to these HYBE agencies in the future.”
“This incident is a significant event that will never happen again in the history of Korean entertainment,” Referring to the letter from SM’s current management, it adds: “The future of SM will change significantly depending on the decision of the shareholders. »
In the letter SM said: “This is a significant event that will never happen again in Korean entertainment history. »
The current management also insisted on this “This year’s shareholder meeting is the final opportunity to fully resolve SM’s decades-long governance issues and take its corporate value as a premier artist entertainment company in Korea to the next level. »
SM specifically included a separate question-and-answer (Q&A) document to convince shareholders.
In answer to a question “Isn’t it good that SM is being acquired by HYBE, which is bigger and in the same industry? »
SM replied: “Good apprentices, good songs, good choreographers and concert planning are given to Big Hit (BTS agency), Pledis (Seventeen agency), ADOR (NewJeans agency) and Source Music (LE SSERAFIM agency), as HYBE has a bigger one Participation in these affiliated companies. »
SM poursuit: “If HYBE owns only up to 40% of SM shares and the remaining 60% is held by general shareholders, there will inevitably be conflicts of interest between SM shareholders and HYBE shareholders”and adds: “HYBE is the biggest competitor in the industry and competes with SM for first and second place. »
They also issued a statement of their support for Kakao’s KRW 90,000 capital increase and convertible bond issuance and their rejection of HYBE’s KRW 120,000 takeover bid.
SM explains: The increase in paid-in capital and the issuance of the convertible bond by Kakao serve the strategic cooperation with us. »
“Since the issuance volume is only 9% of the total volume, there is no management right and since the business area does not overlap with our business, we can expect sufficient synergies to contribute to the value of our shareholders. »
The focus is on the decision of the minority shareholders, who hold 60% of the shares, at the general meeting of SM, which will take place at the end of March.