이 기사는 2020년 02월 05일 08:00 thebell 에 표출된 기사입니다.

Big Hit Entertainment, the South Korean label behind K-pop group BTS, is accelerating its plan to list on the local stock exchange in a deal that could value the company at well above one trillion won.

Big Hit Entertainment has recently sent a request for proposals to a select group of brokerage firms for its planned initial public offering (IPO), sources familiar with the matter said on January 31.

Only four firms, including two domestic brokerage houses and two foreign investment banks, were invited to submit a proposal: NH Investment & Securities, Korea Investment & Securities (KIS), Citigroup Global Market Securities and JP Morgan.

In South Korea, affiliates under the country’s conglomerates account for most of the large-scale IPOs worth over one trillion won. They tend to choose brokerage firms that they and their affiliates have previously partnered with in capital market deals.

However, this is not the case for Big Hit Entertainment. So, it is widely expected that the company will put more focus on candidates’ track record when hiring brokerage firms to lead its IPO.

NH Investment & Securities and Korea Investment & Securities, part of the candidates selected by Big Hit Entertainment, are two top underwriters in the country’s IPO market.

According to the bell’s 2019 league tables, NH Investment retained its first position in the IPO market, bringing in proceeds of more than 1.08 trillion won. The brokerage house worked on most of the notable deals last year, including IPOs of Hanwha Group’s defense technology arm Hanwha Systems that raised 402 billion won; mattress maker Zinus that raised 169 billion won; Hyundai Motor Group’s IT affiliate Hyundai AutoEver that raised 168 billion won.

Korea Investment & Securities came in second, with more than 744 billion won in proceeds from IPOs. The most notable deal that the brokerage firm worked on last year was the listing of Lotte REIT that raised more than 429 billion won.

The two brokerage firms captured about 46 percent of the domestic IPO market in 2019, heavily dominating the country’s equity capital markets. Daishin Securities, a distant third behind Korea Investment & Securities, worked on deals worth only 281 billion won.

“NH Investment & Securities and Korea Investment & Securities are unrivaled in the domestic IPO market, both of which have a proven strong track record,” said an official from a foreign investment bank. “Big Hit Entertainment intends to work with top underwriters for IPOs in the country.”

Big Hit Entertainment’s IPO is expected to value the company at well over one trillion won, which would make it the most valuable South Korean entertainment company in market cap, followed by JYP Entertainment, SM Entertainment and YG Entertainment.

Big Hit Entertainment was founded in 2005 by Bang Si-hyuk, CEO and producer of the company, who is also the largest shareholder with his 43 percent stake. Netmarble, the country’s leading gaming company, is the second largest shareholder with some 25 percent.

(By reporter Yang Jung-woo)