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HYBE's No.3 investor exits from BTS label in block deal

STIC Investments offloads HYBE shares for 814.1 billion won

By Jun 28, 2021 (Gmt+09:00)

HYBE's No.3 investor exits from BTS label in block deal

Seoul-based STIC Investments, the third-largest shareholder in South Korea's HYBE Co., sold its remaining shares in the label behind BTS, in a block deal before Tuesday's market open.

The divestment, at a 9% discount to Monday's closing level, generated 814.1 billion won ($720 million) in proceeds for the venture capital firm, according to investment banking sources.

For the block trade, STIC tapped institutional investors to offload its 2,866,703 shares, or a 7.57% stake in HYBE. They were twice oversubscribed.

It set a price range between 283,000 won and 296,400 won apiece, or a 5-9% discount to Monday's 312,000 won at market close.

Since HYBE listed on the Korea Exchange in October 2020, STIC has slightly reduced its stake in the entertainment powerhouse.   

The block sale took place a week after HYBE hit its all-time high close, buoyed by the boy band's latest track Butter topping the Billboard Hot 100 songs chart for the fourth consecutive week, the longest run for an Asian pop group.

This week, the seven-member group set a new record, topping the Billboard's main singles charts for the fifth straight week.

Since the start of the year, HYBE shares have almost doubled, supported by its $1 billion acquisition for full ownership of Ithaca Holdings, a US-based integrated media company representing artists including Justin Bieber and Ariana Grande.

Earlier this month, the entertainment agency raised $400 million in new share issues to fund the cross-border deal, which should diversify its BTS-dependent business.

Currently, its founder and Chairman Bang Si-hyuk is the largest shareholder with a 33.72% stake, followed by game publisher Netmarble Corp. with around 18%.

In addition to resumed onsite performances expected for later this year, HYBE's earnings are expected to gain fresh momentum from its online fandom community Weverse.

The online fandom platform is set to become a joint venture with the country's online giant Naver Corp., which is now the second-largest shareholder in the operator of Weverse. Additionally, YG Entertainment, the label behind the K-pop girl group Blackpink, will be joining the community platform.
 
Citigroup Global Markets Securities is handling the block sale.

(Updated throughout with the block deal results.)

Write to Jin-seong Kim at sjkim1028@hankyung.com

Yeonhee Kim edited this article.

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