À̹ÌÁö È®´ë [Source: SM Entertainment Group]
CJ ENM, the entertainment unit of South Korean conglomerate CJ Group, confirmed it is acquiring a controlling stake in SM Entertainment from the founder of the oldest K-pop house.
The two companies are expected to make the announcement on Friday. CJ is said to have offered 600 to 700 billion won ($509.6-594.5 million) for the 18.73 percent stake founder and chief producer Lee Soo-man holds in the music label behind an army of K-pop stars from the latest aespa, NCT, and Red Velvet, EXO to older names Super Junior, BoA and Girls¡¯ Generation, according to investment banking sources on Thursday.
CJ has valued SM at about 3 to 4 trillion won, suggesting the company is offering nearly doubled price in premium for the stake as the market cap stood at 1.8 trillion won as of Thursday.
CJ ENM will become the biggest shareholder while Lee will continue to oversee content business as the chief producer.
The two parties are discussing the option of spinning off the music business from CJ ENM to merge with SM Entertainment. At the final talks, Lee may decide to keep a partial stake while yielding the largest stakeholder position to CJ CNM.
CJ ENM shares fell 1.2 percent to close at 181,800 won on Thursday, and SM Entertainment lost 3.53 percent to end at 76,600 won.
By Park Chang-young and Lee Ha-yeon
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]