SEOUL, Oct 27 (Reuters) - Shares of JYP Entertainment, home to K-pop groups TWICE and Stray Kids, jumped over 10% on Tuesday after South Korean media reported that two little-known investor groups were preparing a tender offer for up to 50% of the company.
NEXROC Group and SVCV Inc plan to launch a tender offer in November for a 25% to 50% stake in JYP at a 30% premium to a benchmark share price, Yonhap News Agency and other media reported, citing statements from the Japan- and China-based groups.
JYP said it has not received a tender offer. NEXROC Group and SVCV were not immediately available to comment.
The company has a market value of about $1.06 billion, meaning a 50% stake would be worth about $530 million at the current market value, before factoring in the reported premium.
While an acquisition would give investors a stake in one of South Korea's leading K-pop agencies, whose roster also includes ITZY and DAY6, analysts questioned whether the groups had secured sufficient financing for a transaction of that size.
Data platform PitchBook lists the NEXROC Group as early-stage venture capital-funded in 2025, with a most recent funding round of $25 million.
"The 'pre-tender offer announcement' of JYP Entertainment by NEXROC and SVCV is not typical and could be made illegal by the Korean financial authorities," said Douglas Kim, an independent analyst who writes on Smartkarma.
"A company has to launch a tender offer when they have enough financial backing/assets that would allow them to launch a tender offer," he said, adding that allowing such a pre-tender offer "could set a bad precedent in the Korean equity markets."
An official at the Financial Supervisory Service declined to comment.
NEXROC Group is evaluating 15 acquisition targets across multiple industries and geographies and seeks to retain at least 51% equity ownership in its portfolio companies, according to its website.
The group aims to build $200 billion in assets under management within a decade.
"There are many doubts about what the company is," said Lee Nara, an analyst at Sangsangin Securities in Seoul.
JYP was founded by South Korean singer-songwriter and producer Park Jin-young, known as J.Y. Park. Park owns 15.4% of the company.
JYP shares, which rallied as much as 14%, trimmed earlier gains and traded up 6%.
($1 = 1,325.6500 won)
(Reporting by Hyunjoo Jin and Jack Kim in Seoul; Sam Nussey in Tokyo; Editing by Miyoung Kim and Muralikumar Anantharaman)
