K Enter moves step closer to Nasdaq listing in May

K Enter Holdings Inc., an umbrella entity of South Korea-based entertainment companies creating original entertainment content and managing related intellectual property, is gearing up for its debut on the US stock market in what would be the first such case for a Korean entertainment firm.

K Enter and Global Star Acquisition Inc. on Tuesday announced the public filing of a registration statement on Form F-4, which includes a preliminary prospectus concerning a proposed merger between the two parties in a deal worth $590 million, with the US Securities and Exchange Commission (SEC).

In June last year, the two companies agreed on a business combination.

Global Star is a Nasdaq-listed special purpose acquisition company (SPAC), a publicly traded company created to acquire or merge with an existing company, with a focus on the Nordic region and Asia Pacific, especially Southeast Asia.

Once the transaction is approved by the SEC, as well as both companies’ shareholders, K Enter will go public on the Nasdaq Stock Exchange, which will be marked as the first of its kind for a Korean entertainment company.

They aim to complete the transaction in the second quarter of this year to list K Enter under the name of K Wave Media Ltd. in May. They initially planned to list the combined firm on the Nasdaq in December last year.

K Enter plans to hold a shareholders’ meeting next month at the earliest to discuss whether to nod to the two firms’ marriage, according to sources in the investment banking industry on Wednesday.

TO GAIN MORE CONTROL OF KOREAN CONTENT  

K Enter, founded to acquire six Korean entertainment operating companies, aims to wield more influence over Korean content.

The six allies include Solaire Partners Ltd., a Seoul-based Korean content-specialized private equity firm that has invested in some of the highest-grossing films to come out of Korea, including the Oscar-winning film Parasite.

The group is also joined by four Korean TV series and film production companies – Bidangil Pictures, the producer of outer space sci-fi blockbuster Space Sweepers, Apeitda Production behind The Witch and Studio ANSEILLEN – and one IP merchandising company – Play Company.

K Enter also has its own production team for Korean TV series.

Its Nasdaq listing has an advantage over an initial public offering in Korea in that it's easier to raise more money from global investors for a US IPO.

With the proceeds from the Nasdaq IPO, K Enter plans to up its investment in local production companies to secure more original IPs to diversify its IP portfolio.

As part of IP diversification efforts, K Enter also plans to buy or merge with webcomic and variety show production companies at home and abroad.

K Enter expects the upcoming IPO will help Korean entertainment companies have more bargaining power in negotiations with major content distributors such as global over-the-top (OTT) media platform giants like Netflix Inc.

Korea's entertainment industry has produced many global box-office hits such as Parasite and Squid Game, but the global OTT platforms saw much larger profits than the original content producers through the deals.

Write to Ji-Eun Ha at hazzys@hankyung.com

Sookyung Seo edited this article.