K-pop giant HYBE drops bid for SM Entertainment, ending takeover battle

SEOUL (Reuters) -HYBE Co Ltd, the agency representing top-selling South Korean boy band BTS, withdrew its plan to take control of SM Entertainment Co Ltd, the company said on Sunday.

The move is seen as ending a weeks-long takeover battle between HYBE and social media giant Kakao Corp.

HYBE said its decision to halt the takeover bid came after the stock market had been showing "signs of overheating due to competition."

Kakao last week launched a 1.25 trillion won ($946.80 million) tender bid for up to 35% of SM Entertainment at 150,000 won per share, well above the 120,000 won per share offer from HYBE for a 25% stake that gained little traction with shareholders.

On Friday, shares in SM Entertainment closed at 147,800 won.

HYBE and Kakao agreed to cooperate on matters related to their platforms, HYBE added.

Kakao and SM Entertainment said they welcomed the decision by HYBE.

"Kakao and Kakao Entertainment will continue its tender offer bid until the 26th to secure a further stake and work on the details of business cooperation between HYBE and SM," Kakao said in a statement.

($1 = 1,320.2400 won)

(Reporting by Ju-min Park and Hyunsu Yim; Editing by William Mallard and Jamie Freed)