[Alpha Biz=(Chicago) Reporter Paul Lee] Amid intensifying competition between Kakao and HYBE to acquire SM Entertainment, attention is being paid to the injunction on the ban on the issuance of new and convertible bonds for SM scheduled for the 22nd.
Lee Soo-man, founder of SM Entertainment, filed an injunction with the Seoul Eastern District Court on the 8th to prevent SM Entertainment from issuing new and convertible bonds. The founder argues that it is illegal for SM Entertainment's current management to issue 111.9 billion won worth of new shares and 105.2 billion won worth of convertible bonds to Kakao in a three-way manner, not for management purposes.
In response, SM is expected to prove in its first interrogation whether the issuance of new and convertible bonds was aimed at achieving management purposes.
The industry predicts that the results of the injunction are likely to be released in early March, between the 28th of this month, the deadline for the public purchase date of Hive, and the 6th of next month, the issuance date of Kakao's new shares.
If the injunction is cited, the issuance of new shares will be canceled, lowering the possibility of Kakao's acquisition of SM Entertainment. Both HYBE and Kakao need to secure a minimum stake of 30% in order to incorporate SM Entertainment as a consolidated subsidiary.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
