That would make Hybe a top shareholder in SM Entertainment. Lee is currently SM Entertainment's top investor with a 18.45% stake, according to Refinitiv data, followed by South Korea's National Pension Service, KB Asset management and Norway's Norges Bank Investment Management, its latest filings showed.
The deal is targeted at "raising its competitiveness in the K-pop industry and producing a synergy effect," Hybe said in its filing. Shares of SM Entertainment soared on Friday, rising more than 16% at the open in Seoul. Hybe rose 6% and JYP Entertainment rose 2.5%, while YG Entertainment gained 3.8%.Chung Sung-jun | Getty Images Entertainment | Getty Imageswith its hit "Ditto" last month within six months of its debut.
SM Entertainment is also the agency behind top bands Super Junior, Girls' Generation and Red Velvet, a group that performed in front of North Korean leader Kim Jong Un in 2018 at the most recent height of inter-Korean diplomacy, alongside then president Moon Jae-in. Hybe purchased 3.5 million shares of SM Entertainment at 422.8 billion won — or 120,000 won per share, with a premium of more than 20% compared with SM Entertainment's closing price of 98,500 won as of Thursday's market close.That comes after South Korean internet company Kakao announced plans to acquire a 9% stake in SM Entertainment in a deal worth 217 billion won.