Corporate intrigue at the heart of K-pop

Fans of South Korea’sKHYBEBTSSMHYBEHYBE SM HYBESMKSMHYBEBTS wildly successful pop industry are used to the intrigue surrounding new groups, band members’ romances and their misbehaviour. Now a new source of -pop drama has emerged from an unexpected quarter. On February 10th , an entertainment house which represents the genre’s biggest name, , agreed to buy a 14.8% stake in Entertainment, a rival, from its founder and former chief producer, Lee Soo-man. Mr Lee, who is no longer involved in his firm’s day-to-day business, would be left with roughly 4%, making its largest shareholder. In pursuit of an even closer tie-up, simultaneously launched a tender offer to buy another 25% at a similar premium to the shares’ market price that it is paying Mr Lee. Entertainment says it will resist any attempt at a hostile takeover. The stage is set for a corporate showdown worthy of any pop feud. and Entertainment are the two largest listed -pop companies, with a combined market capitalisation of nearly $9bn. A full merger would create an industry powerhouse, capturing a large chunk of South Korea’s music-production business. Entertainment is particularly strong in talent-scouting. Three years ago it established its own school in Seoul, which now offers three-year courses in everything from vocals and dance to production. , for its part, dominates music distribution through Weverse, a digital platform that hosts exclusive content such as live-streamed concerts and lessons where members teach foreign fans Korean.