BTS agency HYBE announces becoming the biggest shareholder of K-pop industry rival SM Entertainment

BTS' management agency HYBE on Wednesday said that it has become the biggest shareholder of rival SM Entertainment. Taking to Twitter on Wednesday, HYBE CEO Park Ji-won issued an open letter in which he said that his company has completed the acquisition of 14.8 percent stake. The said stake is part of SM founder Lee Soo-man's holdings of 18.5 percent in SM.

SM was founded by Lee Soo-man, who is widely referred to as 'the godfather of K-pop' and credited for producing key figures in an earlier generation of artists such as BoA, Girls' Generation, and TVXQ, which paved the way for the industry's current success. The founder has been mired in an ugly power struggle within his company. Hints of a power struggle got out when SM's co-CEOs -- including Lee's nephew Lee Sung-soo -- announced new plans for the company that notably excluded him.

In a statement to SM fans, artists, employees, and shareholders following the acquisition, Park Ji-won promised full support for SM artists. A part of the statement read, "I would like to express my regret to SM artists in particular, who may have been troubled by the turn of events. We respect SM's artists as much as we do our artists at HYBE. Leveraging the expertise we have accumulated, we will do our best to create a brighter future for all artists under SM."

It also added, "This is an era of change for both companies. We wish any short-term business decisions or prejudgement by some leaders would no longer cause confusion and uncertainty. I hope the management can come to a wise and reasonable conclusion to ensure that our shared visions and business directions are on the right track."

HYBE's purchase on Wednesday comes after an attempt by South Korea's internet giant Kakao to buy a nine percent stake earlier this month -- a move that was quickly challenged by the elder Lee who filed for a court injunction.

HYBE had also offered to purchase a further 25 percent of the company from other shareholders -- an announcement met with fierce opposition from SM's co-CEOs and executives, who accused the entertainment giant of a "hostile takeover".

The purchase was made nearly two weeks earlier than its initial schedule of March 6, which Yonhap news agency said likely was an attempt to end the acquisition process smoothly ahead of a SM shareholders' meeting next month.