ENTERTAINMENT
SM reacts angrily to Bang Si-hyuk's statement, "Hive, no hostile M&A" for "distortion of facts"
On the 3rd, SM announced its position, saying, “We express our position regarding Hive Chairman Bang Si-hyuk’s interview with CNN.”
SM said, "Chairman Bang Si-hyuk said that a hostile M&A is to acquire a company in the market against the will of the majority or oligopolistic shareholders. However, a hostile M&A involves the board of directors (not the majority or oligopolistic shareholders) taking legal responsibility for management. “It means acquisitions and mergers of companies that are carried out without the consent of the Director.”
He then raised his voice, saying, "Hostile M&A usually takes the form of a tender offer or proxy fight, and it is exactly the same as the hostile M&A activities that Hive is currently attempting."
In addition, "Chairman Bang Si-hyuk said that in response to the fact that they are trying to take over the entire industry, it is difficult for SM and Hive to become an absolute monopoly even if they combine all the CDs sold in Korea." He added, "When the two companies combine, it will account for about 66% of the total market sales." He expressed concern, saying, "A group of monopolistic companies will be created. The market monopoly of a single company will hinder K-POP's diversity and fair competition and lead to a decline in industrial competitiveness."
In addition, "Hive is attempting a hostile M&A against SM by joining hands with former general manager Lee Soo-man, who is the cause of SM's governance problems they pointed out," he said. , promised 70 billion won to acquire shares of two companies owned by former general manager Lee, and above all, decided on a hostile M&A that would cost a large sum of more than 1 trillion won without conducting a single due diligence on SM.”
Lastly, he criticized, "SM does not believe that Hive's governance structure is sound or reasonable. Ultimately, if Hive's hostile M&A is successful, we have serious concerns that we will have no choice but to regress to SM only for major shareholders."
We would like to express our position regarding Hive Chairman Bang Si-hyuk's CNN interview that was released on March 3.
◆ Chairman Bang Si-hyuk is distorting the meaning of ‘hostile M&A’
Chairman Bang Si-hyuk said, “Hostile M&A is the acquisition of a company in the market against the will of the majority or oligopolistic shareholders.” However, hostile M&A refers to takeovers and mergers of companies carried out without the consent of the Board of Directors (not the majority or oligopolistic shareholders), who is legally responsible for management. Additionally, hostile M&A usually takes the form of a tender offer or proxy fight, which is exactly the same as the hostile M&A activities that Hive is currently attempting.
◆ Chairman Bang Si-hyuk is distorting the harmful effects of the ‘K-POP monopoly’
Chairman Bang Si-hyuk said, “As for trying to take over the entire industry, it is difficult for SM and Hive to become an absolute monopoly even if they combine the volume of CDs sold in Korea.” However, when the two companies combine, a single monopoly company will be created, accounting for approximately 66% of total market sales. A single company's market monopoly hinders K-POP's diversity and fair competition and leads to a decline in industrial competitiveness.
◆ I do not believe that Hive’s governance structure is sound or reasonable.
Chairman Bang Si-hyuk said, “SM pointed out governance issues, and Hive has resolved most of SM’s governance issues through this share acquisition.” However, Hive is attempting a hostile M&A against SM by joining hands with former general manager Lee Soo-man, who is the cause of SM's governance problems they pointed out.
In addition, KRW 10 billion was promised for the planting of trees by former General Manager Lee, which had already been a problem through various media reports, and KRW 70 billion for the acquisition of shares in two companies owned by former General Manager Lee. Above all, one due diligence on SM was promised. We decided on a hostile M&A that would cost more than 1 trillion won.
It is questionable whether Hive's board of directors, which passed such an unusual agenda, is only loyal to its major shareholders. Therefore, SM believes that Hive’s governance structure is not sound or reasonable. Ultimately, we have serious concerns that if Hive's hostile M&A succeeds, we will have no choice but to regress to SM only for major shareholders.
Reporter Junho Yoon, Ten Asia delo410@tenasia.co.kr
