MTN News reported that Kakao reached out to NCSoft to sell S.M.
Since late last year, Kakao has been reported considering to sell off S.M Entertainment and has contacted different prospective buyers.
On 29 Jan, the source relating to Kakao and NCSoft revealed "Kakao is reviewing its plan to sell S.M Entertainment and discussed secretly with NCSoft on this matter late last year." The source added, "No one knows how serious Kakao was and what was the response from NCSoft side."
Another source in the industry said "I believe the discussion did take place."
Kakao, since late last year, has been speculated to sell S.M Entertainment as the CEO of Kakao Entertainment, Bae Jaehyun, has been charged with stock price manipulation in the attempt to buy S.M Entertainment. Also, there has been internal conflict.
NCSoft is a dominant target for the S.M sale attempt as the company is embarking into entertainment platform business following the declined competitiveness in gaming market.
However, NCSoft is under re-construction, minimizing all sectors unrelating to its main business. The S.M purchase is less likely.
NCSoft has responded that "We are not considering to acquire S.M."
Following the acquisition of S.M Entertainment, Kakao has faced internal conflict and legal investigation. Some investment advisors see this acquisition poisonous. The best case scenario is Kakao overcoming legal complication and increasing its control over S.M, re-organizing it and making its governance more transparent.
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