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Hybe founder comments on US ambitions and failed SM bid
By Chris Cooke | Published on Thursday 16 March 2023
The founder and Chairman of K-pop powerhouse Hybe told journalists earlier this week that his company will be announcing a “substantial number of acquisitions and investments” in the US market this year. Though those journalists were understandably more interested to know what Bang Si-hyuk had to say about his firm’s failed bid to take control of a rival closer to home.
South Korea-based Hybe, of course, made a big entry into the US market in 2021 by acquiring Scooter Braun’s company Ithaca Holdings, bringing with it label group Big Machine and Braun’s own artist management business. Then last month it announced a deal to buy QC Media Holdings, the Atlanta-based company which owns the Quality Control Music label that boasts a roster including Migos, Lil Baby, Lil Yachty and City Girls.
Confirming that that’s just the start of Hybe’s ambitions in the Americas, Bang told reporters – according to Reuters – “We will announce a substantial number of acquisitions and investments within this year as part of our efforts to widen our presence in the US”. And, as part of all that, Hybe is looking to acquire “top-tier” labels in the Latin music market too, Bang added.
However, while that might all be super exciting, the real excitement of late has been watching the sparring between Hybe and South Korean internet firm Kakao as they battled it out for control of another big K-pop business, SM Entertainment.
The management at SM initially negotiated a deal with Kakao which included the issuing of new shares in their company. But SM founder Lee Soo-man opposed that deal, and enlisted the help of Bang and Hybe in a bid to stop it. Lee sold most of his SM shares to Hybe, which then announced a plan to buy more SM shares until it had a 40% controlling stake in the business.
SM management hit out at that proposal, dubbing it a “hostile takeover”. They argued that the proposed alliance with Kakao was the best option for SM’s artists and shareholders.
Lee also went to court to seek an order blocking the issuing of new SM shares. Which he got, forcing the initial SM/Kakao deal to be abandoned. But then Kakao announced its own plan to buy up 40% of SM stock, offering existing shareholders a higher price than Hybe had. Not wanting to get into a costly price war, Hybe then bailed on its plan to control SM.
At this week’s press conference, according to Koreaboo, Bang revealed that Hybe had made unsuccessful approaches to SM about an acquisition before. However, within Hybe there were always differing opinions on whether expansion through an SM acquisition was the best option.
But, he said, when Lee approached him about a new bid to take control of SM, he concluded that many of the issues that had previously made a Hybe/SM alliance less attractive had now gone away, so maybe the time was right to have another go at making that alliance happen.
However, he conceded, the “competitive and overheated battle” for control of SM that followed “was not expected”. Once that was underway, Bang decided that it simply wasn’t a battle that Hybe wanted to be fighting.
