South Korean entertainment powerhouse HYBE sold its entire 7.67% direct stake in YG Plus, a subsidiary of rival YG Entertainment, for a total of 38.22 billion South Korean won (approx. USD $27 million).
The transaction was carried out through after-hours block trade on Tuesday (September 23), according to a regulatory filing. HYBE sold 4.86 million shares at 7,857 won ($5.63) per share, representing a discount to YG Plus’ closing price of 8,860 won ($6.35) a day before the disposal was announced.
Shares of YG Plus fell 3.6% in Seoul trading on Tuesday. At midday trading on Wednesday, shares of the company extended their slide, falling over 7% to hit a three-month low.
Following the sale of its direct ownership in YG Plus, HYBE’s total ownership in the YG Entertainment unit will reduce to 10.23% from 17.9% as it still maintains a position through subsidiary Weverse, South Korea’s Chosun Biz reported. After the sale, only Weverse’s stake remains, making it the second-largest shareholder behind YG Entertainment, which holds 30.22%.
HYBE cited “optimizing investment asset portfolios” as the reason for the disposal in its filing with Korea’s Financial Supervisory Service.
The partnership between HYBE and YG Entertainment began in 2021 when HYBE acquired a stake in YG Plus, the record distribution arm of YG Entertainment. The deal allowed HYBE artists including BTS to distribute albums through YG Plus’s network, while YG acts like BLACKPINK joined Weverse, HYBE’s superfan platform.
Aside from YG Plus, HYBE also offloaded its stake in another rival, SM Entertainment, earlier this year. HYBE sold its entire 9.38% stake in SM to Tencent Music Entertainment, China’s largest owner of music streaming services, for nearly $180 million.
These divestments come as HYBE continues its expansion outside Korea. Earlier this week, HYBE established its India-based subsidiary in Mumbai, marking the firm’s fifth international headquarters. The Mumbai office joins HYBE’s other global headquarters in Japan, America, Latin America, and China.
These expansions support HYBE Chairman Bang Si-hyuk’s vision of globalizing the K-pop training methodology.
Bang predicted that “the strategy of securing a foothold in the world’s major music markets and applying this methodology is producing results, and if the current trend continues, the landscape of the global music market dominated by the Big 3 global companies will change significantly,” according to a statement cited by Maeil Business Newspaper.
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