HYBE Co.’s near-$1 billion buyout of Ithaca Holdings LLC , star-studded U.S. media company, after rebranding from Big Hit Entertainment for international identity makes its first ambitious branch-out to go global and reduce over-reliance on BTS.
The Korean entertainment firm on Friday announced its fully-owned U.S. subsidiary Big Hit America Inc. will take over a 100 percent stake in Ithaca Holdings for $950 million. The Korean parent will fuel 1.07 trillion won into the American unit for the buyout. The deal includes Carlyle Group’s minority stake.
Shares of HYBE, still trading as Big Hit Entertainment, closed Monday 2.06 percent higher at 248,000 won ($219.92) after hitting 260,000 won upon target price upgrades by brokerage houses.
Hana Financial Investment adjusted its target to 360,000 won from 320,000 won, and Yuanta Securities Korea to 350,000 won from 260,000 won. eBest Investment & Securities saw the stock going as high as 502,000 won..
HYBE shares that joined the Kospi with IPO price of 135,000 won in October last year had soared to 350,000 won but have been boxed around 250,000 won over the last six months.
HYBE will be commanding full ownership in Ithaca Holdings and its properties such as SB Projects and Big Machine Label Group. Ithaca Holdings CEO Scott "Scooter" Braun will join the board of HYBE and Scott Borchetta will remain CEO of Big Machine Label Group.
Ithaca Holdings is an American media company with businesses ranging from music, film to television. It is led by SB Projects` founder Scooter Braun, who manages global pop superstars including Justin Bieber, Ariana Grande and Demi Lovato.
HYBE has been bold in bulking up since its IPO in October. Recently, it had its subsidiary beNX take over V Live video streaming business from local internet giant Naver Corp. and invested 70 billion won in YG Plus, the investment arm of another major Korean label YG Entertainment.
The entertainment firm changed its name from Big Hit Entertainment to HYBE and decided to spin off its own music label business to set it up as an independent entity, tentatively named as Big Hit Music.
Other than BTS manager Big Hit Entertainment, the company also has Seventeen manager Pledis Entertainment, and GFriend manager Source Music under its wing.
HYBE will be able to run different labels independently in Korea and U.S that would allow each label to facilitate management service tailored to individual artist, said Lee Sun-wha, analyst at KB Securities.
By Kim Ki-chul and Cho Jeehyun
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