South Korea's HYBE to sell its stake in SM Entertainment - Reuters

SEOUL, March 24 (Reuters) - South Korean music label HYBE (352820.KS), which manages boy band BTS, said on Friday it would try to sell its entire stake in SM Entertainment (041510.KQ) after losing a battle for control of the K-pop pioneer.

HYBE's 15.78% stake in SM is worth 564 billion won ($437.14 million) based on social media giant Kakao Corp's (035720.KS) tender offer to acquire up to 35% of the company at 150,000 a share, which closes on Friday.

That would represent a gain of more than 20% from the price HYBE paid for its stake, most of which was acquired in February from SM founder Lee Soo-man, 70, who is considered the "godfather" of the K-pop industry.

For weeks, HYBE battled against Kakao to acquire SM before dropping its bid earlier this month. But cashed-up Kakao's price was well above HYBE's 120,000 won per share offer that had gained little traction with shareholders.

Kakao's offer was also backed by the current SM management team, led by Lee's nephew.

HYBE chairman Bang Si-hyuk said last week that he was "personally satisfied" with a new partnership with Kakao on fan platform businesses despite losing the battle over SM.

HYBE plans a substantial number of acquisitions and investments this year as the K-pop giant looks to boost its U.S. presence, Bang added.

SM shares were up 1.77% as of 11:18 a.m. (0213 GMT) while the smaller Kosdaq Index saw a 1.13% rise. HYBE shares were up 0.85%, compared with a 0.53% drop in the benchmark KOSPI market.

SM is home to popular K-pop groups such as Girls' Generation, H.O.T., EXO, Red Velvet, Super Junior, SHINee, NCT Dream and Aespa.

($1 = 1,290.2100 won)

Reporting by Hyunsu Yim; Editing by Jacqueline Wong and Jamie Freed

Our Standards: The Thomson Reuters Trust Principles.

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