×

Big Hit, Home to BTS, Eyes $5 Billion Valuation in IPO Bid; Will Coronavirus Stall the Plan?

South Korea’s Big Hit Entertainment, home to global K-pop sensations BTS, is moving toward an IPO and recently selected underwriters. Sources in the investment banking industry say JP Morgan, NH Investment & Securities, and Korea Investment & Securities were chosen as main managers early this week, while Mirae Asset Daewoo is also on board as a joint manager.

According to a banker that took part in the selection process, Big Hit stated in its request for proposals that it aims to enter the stock market in 2020. The source, who spoke to Variety on the condition of anonymity, said the stock firms that had bid for the deal evaluated the label’s maximum valuation to be $5 billion (KRW 6 trillion), but also said the price was partly due to the intense competition.

“We see that there’s a fair chance that Big Hit will go for an IPO at a valuation set between $2.5 billion and $3.3 billion,” the source told Variety. “The label’s performance in 2019, the popularity of BTS, and the price-earning ratio of local entertainment companies listed in the Korean stock market have been taken into account [to come up with the valuation],” he added. “The IPO will draw a lot of interest from both local and international investors, as the K-pop industry is currently at its best days and BTS is enjoying unprecedented success,” the source told Variety.

In 2019, Big Hit’s revenue doubled from the previous year to $494.6 million and reached profits of $82 million. That is bigger than the sum of the profits earned by the country’s top three talent management agencies — SM Entertainment, JYP Entertainment and YG Entertainment — in the same year.

At a recent briefing session held in Seoul, Big Hit unveiled that it would further expand and diversify its business model in 2020.

“We’ve become a multi-business label by acquiring Source Music (the label behind K-pop girl band GFRIEND) and setting up Belief+, a joint venture with CJ ENM,” said Bang Si-Hyuk, founder and co-CEO of the label, at the event. Belief+ plans to launch a multinational boy band this year, while a new girl band is set for a 2021 debut through a collaboration between Big Hit and Source Music.

However, industry insiders say that one of Big Hit Entertainment’s risks is its high level of reliance on BTS. A number of so-called “BTS-themed stocks” have recently experienced fluctuations: They rose when the K-pop king released a new album, and slumped when the band’s April concert in Seoul was cancelled this week due to coronavirus concerns.

“At this point, we still assume that Big Hit’s IPO is likely to happen this year,” Variety’s source said. “But because BTS is unquestionably the most important factor in the company’s financial potential, if coronavirus further slows not only BTS but also the entire K-pop industry, there is a possibility that [Big Hit] might postpone the plan.”

More Music

  • The Barbican presents Viviana Durante Company,

    London's Barbican Extends Closure, Focuses on Digital Offer

    Leading London cultural center The Barbican has extended its temporary closure until June 30, but in the meantime it is focusing on its online program. Nicholas Kenyon, The Barbican’s managing director, said: “Having reviewed the current government advice and looking at how long social distancing measures are likely to be in place, we feel we’re [...]

  • Trey Anastasio of Phish performs at

    Phish to Unveil New Album on Wednesday

    Phish will debut a brand new studio album, “Sigma Oasis,” during an online listening party at 9pm ET on April 1 on LivePhish.com, the band’s Facebook page as well as its SiriusXM channel. The group made the announcement Tuesday (March 31) during a video chat as part of its “Dinner and a Movie” archival concert [...]

  • Live Nation Logo. (PRNewsFoto/Live Nation)

    Live Nation Launches $10 Million ‘Crew Aid’ for Touring Staff Impacted by Coronavirus

    As anyone who’s ever attended a concert can deduce, musicians aren’t the only ones suffering from the impact of the coronavirus pandemic on the live-entertainment industry: An entire economy of roadies, technicians, security and many more have been deeply impacted by the postponement of virtually every concert tour in the world. Live Nation, the world’s [...]

  • Lindsay Lohan photographerd at the Mercer

    Lindsay Lohan Teases New Music: 'I'm Back!'

    Lindsay Lohan is making a return to music after a 12-year hiatus. The former child star-turned-singer-songwriter-turned-Mykonos-based businesswoman posted a mysterious 30-second clip to her social media accounts today, captioning it with nothing but “I’m back!” and a pre-save link. The teaser centers in on a staticky television, flashing between moments from Lohan’s career as her [...]

  • Lindsay Lindenbaum on 'Tomboy,' Female Drummers,

    How 'Tomboy' Filmmaker Used SXSW Cancellation to Fine-Tune Her Film

    “Tomboy” filmmaker Lindsay Lindenbaum spent five years following four female drummers trying to make it in a male-dominated world. Lindenbaum profiles Bobbye Hall, a drummer who started at Motown Records in the late ’60s and later toured with Bob Dylan. Samantha Maloney, whose obsession with MTV’s “Headbangers Ball” as a teenager led her to fall [...]

  • Tiger King

    'Tiger King' Joe Exotic's 10 Wildest Music Videos

    From the opening scenes of “Tiger King,” it’s clear that Joe Exotic, the star of Netflix’s latest documentary sensation, was ready to do just about anything to become famous. Throughout the series, he attempts to film his own reality show, runs for the governor of Oklahoma and even tries his hand at country music. His [...]

  • Songs for Screens Anzie Blue

    Songs For Screens: How Chvrches Scored a Synch Smash in Netflix's ‘Elite’ With 'Forever'

    Chvrches frontwoman Lauren Mayberry was taking a break from making her band’s upcoming fourth album when she began a self-isolated quarantine at her home in Los Angeles the weekend of March 13 — the same weekend that Season 3 of the teen drama “Elite” debuted on Netflix to an especially binge-hungry audience. Though Mayberry was aware that [...]

More From Our Brands

Access exclusive content