SEOUL: Shares of JYP Entertainment, home to K-pop groups TWICE and Stray Kids, jumped more than 10% on Tuesday (Oct 27) after two little-known investor groups said they were preparing a tender offer for up to 50% of the company.
NEXROC Group and SVCV Inc plan to launch a tender offer in November for a 25% to 50% stake in JYP at a 30% premium to a benchmark share price, the Japan- and China-based groups said in a statement.
JYP said it had not received a tender offer.
The Financial Supervisory Service (FSS), South Korea's financial watchdog, said in a statement on Tuesday that it was highly unusual to announce publicly an intention to launch a tender offer before filing a tender offer registration statement.
Noting JYP's share price had become more volatile since media reports of the plan, the FSS said it was closely watching for abnormal trading and rule violations, and would quickly open an investigation if it suspected unfair trading.
It also said that, without a filing, it was difficult to verify details of the bidder and its funding, and the deal might not go ahead. It urged investors to beware of losses from share price swings.
JYP has a current market value of about $1.06 billion, meaning a 50% stake would be worth about $530 million before factoring in the reported premium.
UNUSUAL MOVE
While an acquisition would give the investors a stake in one of South Korea's leading K-pop agencies, whose roster also includes ITZY and DAY6, analysts questioned whether the groups had secured sufficient financing for such a significant transaction.
"A company has to launch a tender offer when they have enough financial backing/assets that would allow them to launch a tender offer," said Douglas Kim, an independent analyst who writes on investment research platform Smartkarma, adding that allowing such a pre-tender offer "could set a bad precedent in the Korean equity markets."
Data platform PitchBook lists the NEXROC Group as early-stage venture capital-funded in 2025, with a most recent funding round of $25 million.
NEXROC Group is evaluating 15 acquisition targets across multiple industries and geographies and aims to retain at least 51% equity ownership in its portfolio companies, according to its website.
The group aims to build $200 billion in assets under management within a decade.
"There are many doubts about what the company is," said Lee Nara, an analyst at Sangsangin Securities in Seoul.
JYP was founded by South Korean singer-songwriter and producer Park Jin-young, known as J.Y. Park. Park owns 15.4% of the company.
JYP shares, which rallied as much as 14%, trimmed earlier gains and closed up 6.8%. - Reuters
($1 = 1,325.6500 won)
