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HYBE calls off SM Entertainment takeover bid

K-pop behemoth HYBE has abandoned its controversial move to take over rival SM Entertainment.

HYBE, which is home to acts including BTS, Tomorrow X Together, NewJeans, LE SSERAFIM and Seventeen, says it has taken the decision due to the market “overheating”, amid competition with South Korean internet giant Kakao.

“HYBE assessed that the market situation had overheated due to competition with Kakao and Kakao Entertainment, which could negatively impact HYBE’s shareholders’ rights,” it says in a statement. “The two companies ― HYBE and Kakao ― also reached an agreement to seek cooperation on platform businesses.”

The Korea Times reports that Kakao will now work toward a controlling stake in SM and its management rights, while continuing to seek cooperation with HYBE on its platform business. Kakao offered SM shareholders 150,000 KRW (€108) per share, compared to HYBE’s previous offer of 120,000 KRW (€86) per share.

“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment”

“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment,” says a Kakao statement. “As a partner sharing mutually positive impacts, Kakao and Kakao Entertainment will continue various strategic cooperative relations with HYBE and SM Entertainment to help stoke the global status of K-pop and K-culture.”

Seoul-based SM Entertainment says that it “welcomes” HYBE’s decision to suspend its takeover bid. Last month, HYBE purchased a 14.8% stake in SM, in a move led by HYBE’s global team that involved acquiring former chief producer Lee Soo-Man’s shares in SM – days after the announcement of the SM 3.0 business strategy and development plan.

It pledged to buy another 25% stake in a separate notice, leading SM Entertainment CFO Cheol Hyuk Jang to release a video denouncing HYBE’s “hostile takeover”. Days earlier, SM had sold KRW 217.2 billion ($172.8m) shares – a 9.05% stake – to Kakao Corp.

In February Bloomberg reported that SM had seen its profits soar 70% thanks to the return of concerts and live events, posting an operating profit of 25.2 billion KRW (€18.3 million) in Q4 2022. Sales rose 18.2% to 256.4bn KRO, with its number of concerts in the three-month period up 35 times on the same quarter in the Covid-hit 2021.

 


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Second K-pop arena planned for South Korea

A second arena dedicated to staging K-pop concerts is planned for South Korea’s capital city, Seoul.

It was announced yesterday (4 April) that South Korean IT giant Kakao and the Seoul metropolitan government have signed an agreement to start building the arena in Seoul’s northern Dobong district, this June.

Expected to be complete in October 2025, Seoul Arena will reportedly include a concert venue boasting state-of-the-art sound equipment, with a seating capacity of around 19,000 and a maximum capacity of 28,000 for standing events.

The arena will also feature a separate 7,000-capacity concert venue, as well as a cinema and commercial facilities.

Kakao said it expects Seoul Arena to attract some 1.8 million visitors per year and contribute to revitalising the local economy and bolstering the ecosystem of concerts.

Kakao said it expects Seoul Arena to attract some 1.8 million visitors per year

Kakao will reportedly be in charge of operating and maintaining the Seoul Arena for 30 years after it opens, while the venue will be owned by the city government.

Though Kakao has described the project as South Korea’s “first and largest” arena dedicated to K-pop, media giant CJ ENM and AEG began construction on a similar project last October.

The pair’s CJ LiveCity Arena, slated to open in Seoul’s Goyang City in 2024, is reportedly designed to accommodate 20,000 indoor attendees, with the capacity to extend to another 40,000 outdoors.

It is also said to be equipped with “the most powerful live performance infrastructure in the world”, including stage facilities, sound and lighting systems.

Centrally located between five of Korea’s largest cities, AEG projects the new venue will attract more than 20 million visitors annually.

 


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Ticketing startup Festy lands blockchain investment

Cork, Ireland-based ticketing startup Festy has announced a partnership and investment deal with South Korean internet company Kakao, which will focus on the development of blockchain payment and analytics applications.

Launched in 2016, Festy initially allowed the storage of payments and ID data on music festival wristbands. The company has since evolved into a blockchain ticketing and payments mechanism for retailers, festivals and conferences, using a distributed ledger to record transactions.

The company has partnered with Ground X, a subsidiary of South Korean internet conglomerate Kakao. Ground X is building a blockchain platform called Klaytn for developing services on top of existing technology.

Festy’s ticketing system allows users to check in and out of clubs and other live event venues. This function is of particular interest to Kakao, says Festy founder Graham de Barra.

“It’s really good for organisers to see the flow of people at their events and [with Festy] they have the auditable, real-time ability to see it on a chain,” comments de Barra.

“We can allow a more transparent system for these transactions, where the consumer can get remunerated for contributing towards big data”

The system will also enhance privacy, allowing the festivalgoer more control over the data that is collected about them.

“We can allow a more transparent system for these transactions, where the consumer can get remunerated for contributing towards the big data that’s being built around them. The more they enrich it, the more they can earn – or they can totally opt out,” says de Barra.

The company hopes to launch Festy on the Klaytn platform in July.

Other blockchain ticketers include Blockparty, led by former NME executive Shiv Madan, Tari headed by Ticketfly co-founder Dan Teree, Crypto.tickets, Aventus and Ticketmaster-owned Upgraded.

Dutch blockchain ticketing service GUTS Tickets currently holds the record for the largest-ever blockchain ticketing sale. The company recently beat its previous record to sell around 50,000 tickets in two hours. The fraud- and tout-proof service uses GET Protocol to track tickets and distribute unique, non-duplicable e-tickets.

How the worlds of ticketing and blockchain intersect

 


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