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| ▲This photo provided by Kakao Corp. show the logo of Kakao. (PHOTO NOT FOR SALE) (Yonha) |
SEOUL March 4 (Yonhap) -- As the Judicial system of South Korea puts on a hold to Kakao’s plan to acquire SM Entertainment’s shares on March 3, Kakao started their process to come up with a contingency plan.
Official of Kakao addressed “We will gather our plans and thoughts before addressing our future plans.”
Given the situation Kakao’s stance can be understood as the company is in need of time in order to process the current situation and court’s judgment.
Throughout the platform and entertainment industry, the current situation of stagnation of Kakao caused by the judgment of the court is drawing a lot of interest
For now, there is a possibility that Kakao might try to purchase the 900 billion won worth SM Entertainment share using the fund received from the Saudi Arabia’s Sovereign Wealth fund and Singapore investment authority.
Moreover, it is difficult to rule out anything since the representative of the Kakao Entertainment, Kim Sung-soo has recently addressed his strong intension to land a partnership with SM Entertainment and investment deal within the entertainment agency.
However, there is also a possibility that Kakao will give up their plan to acquire shares of SM Entertainment. This assumption is based on the thought that Kakao Entertainment might focus solely on business cooperation with HYBE who has became the biggest shareholder of SM Entertainment.
Earlier, The Seoul Eastern District Court, has decided to cite an injunction filed by the former executive producer of SM Entertainment Lee Soo-man, against SM Entertainment to ban the issuance of new stocks and convertible bonds.
As a result, Kakao’s intention to acquire over 111.9 billion won worth newly issued SM Entertainment’s stocks, and convertible bonds worth 105.2 billion won to become the second biggest shareholder of SM Entertainment has been put to a halt.
(This article is translated from Korean to English by Joonha Yoo)
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