HYBE Postpones SM Entertainment Acquisition Following K-Pop Takeover Drama

South Korean entertainment label HYBE has suspended its takeover bid for SM Entertainment Co., Ltd. following the weeks-long corporate battle with tech giant Kakao.

The home of several K-pop superstars, including BTS, Seventeen and TXT, among others, released a statement Sunday regarding its decision to suspend the acquisition process of SM Entertainment, according to CNN.

HYBE explained that the decision stemmed from the "competition with both Kakao and Kakao Entertainment" and that "the company has also taken into account the potential negative impact on HYBE's shareholder value."

Last week, the South Korean internet company said it would continue its quest to acquire SM — one of the most prolific K-pop agencies established in 1995 and represents hit artists, including BoA, Girls Generation and EXO — as it sought to purchase at least 35% of the music label, days after a previous share sale agreement to purchase 9.05% stake at the company got banned by the South Korean court.

Kakao also offered SM shareholders 150,000 won ($115) per share, surpassing HYBE's initial offer of 120,000 won ($92) per share.

On Friday, HYBE and Kakao reportedly agreed to stop competing for SM Entertainment's shares, AllKpop reported, citing the South Korean financial industry. It is unclear what the agreement entailed. But it appeared that it led to the former's decision to discontinue its acquisition process.

The takeover bid made the headlines in South Korea, sparking more accusations against HYBE chairman Bang Si-Hyuk that he's attempting to monopolize the Korean music industry after he acquired 14.8% directly from SM Entertainment founder Lee Soo-man, often referred to as the "godfather of K-pop" last month.

Bang has since denied the claims, telling CNN's Richard Quest in an interview, that "a lot of misinformation" has surrounded HYBE's bid to raise its share over SM Entertainment.

"It wouldn't be correct to say that we're trying to take over the whole industry," the producer-turned-chairman said.

HYBE currently owns about 15.8% of SM and has become the company's largest shareholder to date. But the company said that the price of acquiring SM "exceeded the fair acquisition price range as the competition with both Kakao and Kakao Entertainment intensified."

Elsewhere in the statement, HYBE said that both companies have agreed to "cooperate with matters regarding their platforms in the future." SM Entertainment said in a statement to the outlet that it "welcomes" the former's decision to discontinue its takeover bid.

Kakao and its entertainment unit will reportedly persist on its offer to SM shareholders, which is expected to conclude on March 26, per CNN.