Kakao bought SM Entertainment shares 553 times in 4 days to beat a rival bid

In February 2023, Kakao and its entertainment unit were fighting HYBE, the agency behind BTS, for control of K-pop label SM Entertainment. HYBE had made a tender offer at 120,000 won per share. Over four days, Kakao and its affiliates bought SM shares on 553 separate occasions, spending roughly 240 billion won and repeatedly bidding the price above HYBE's offer — Korea's Financial Supervisory Service later said about 110 billion won of those purchases were meant to keep the price out of HYBE's reach rather than to build a stake.

The tactic worked: HYBE withdrew its bid once SM shares traded well past its tender price, and Kakao closed the deal in March 2023 with a 39.87% stake. The FSS referred Kakao Corp, Kakao Entertainment and three executives to prosecutors that October, and Kakao's chief investment officer, Bae Jae-hyun, was arrested the same month.

Kakao founder Kim Beom-su was indicted in August 2024 on stock-manipulation charges and held in detention. In October 2025 the Seoul Southern District Court acquitted him, ruling prosecutors had not proven the share purchases amounted to manipulation rather than legitimate competitive bidding; prosecutors had sought a 15-year sentence. The case was under appeal as of early 2026.

Kakao bought SM shares 553 times in 4 days, spending 240B won to push the price above HYBE's offer, forcing withdrawal; founder acquitted in 2025.

Buying a target's own shares to keep the price above a rival's tender offer blurs the line between competing for a company and manipulating its market — that ambiguity is what the trial turned on.

553 purchases in four days is a pattern regulators can point to even when each individual trade looks like ordinary bidding, which is why the FSS treated the volume itself as evidence of intent.

Winning the deal did not end the exposure — an M&A tactic that succeeds commercially can still trigger a two-year criminal case against the people who executed it.

A takeover tactic that works in the boardroom can still be manipulation in a courtroom — winning the deal doesn't settle how you won it.