Big Hit Entertainment Co., the South Korean label behind K-pop superstar BTS, gained the regulatory go-ahead for what would be the biggest initial public offering in Seoul this year.

The preliminary filing gained approval from the Korea Exchange last Friday. The IPO would be arranged by NH Investment & Securities, Korea Investment & Securities and JPMorgan Chase, with Mirae Asset Daewoo as joint underwriter.

While the number of shares and pricing band have not been decided, analysts estimate Big Hit’s valuation to reach at least 4 trillion won ($3.4 billion), which would eclipse the combined market cap of Korea’s top three labels – JYP, SM and YG. Unlike its peers that trade on the junior Kosdaq, Big Hit will go straight to the main Kospi market.

Founded in 2005, Big Hit took off with the massive international success of BTS, a seven-member boy group formed in 2013 that is now arguably the biggest boyband in the world. The agency has since added several other K-pop acts, including its second boyband TOMORROW X TOGETHER and girl group GFriend.

Bang Si-hyuk, the agency’s founder and co-chief executive, held a 45.12 percent stake in Big Hit as of May. In 2019, the company generated sales of 587.2 billion won and an operating profit of 98.7 billion won, exceeding the total of SM, YG and JYP, which together earned 85.9 billion won.

Bang is set on using the IPO proceeds to create a new business model that breaks the mold of Korea’s typical entertainment agency, according to people familiar with the company. In a move highly unusual for its industry, Big Hit hired a team of top database and IT developers, and even attained a startup license.

Insiders say Big Hit is not just an entertainment agency but more of a startup company in the eyes of Bang, who has shown keen interest in many new business ideas to take Korea’s entertainment industry to the next level.

By Kang Woo-seok and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]