In today’s briefing:
- Confirmed: Conditions & Schedule of Block Deals Pre-Disclosure Rules in Korea
- HYBE Invests Additional 104 Billion Won in SM Entertainment – Why?
Confirmed: Conditions & Schedule of Block Deals Pre-Disclosure Rules in Korea
- Insiders must disclose transaction details, complete deals within 30 days, limit deviations to 30%, and submit disclosures 30 days before transactions.
- Financial investors, including institutional ones, are exempt. This encompasses local pension funds (including NPS) and foreign financial investors. Deals under 1% of total shares and less than ₩5B are exempt.
- Confirmation of the timeline indicates many block deals before July. We should hunt potential deals for proactive setups. Also, we should monitor basis widening in futures due to short-selling ban.
HYBE Invests Additional 104 Billion Won in SM Entertainment – Why?
- After the market close, it was announced that HYBE (352820 KS) acquired a 3.7% stake (868,948 shares) in SM Entertainment Co (041510 KS) for 104.3 billion won.
- HYBE’s acquisition of shares was accomplished through the exercise of a put option by SM Entertainment’s founder Lee Soo-Man. After this purchase, HYBE will own 12.6% stake in SM Entertainment.
- We like SM Entertainment at current levels. Valuations are attractive and there is a strong pipeline of new music/songs to be launched by its artists in 2Q 2024.
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