The move is seen as ending a weeks-long takeover battle between Hybe and social media giant Kakao Corp.

Hybe said its decision to halt the takeover bid came after the stock market had been showing “signs of overheating due to competition.”

Kakao last week launched a ₩1.25 trillion (US$946.80 million) tender bid for up to 35% of SM Entertainment at 150,000 won per share, well above the ₩120,000 per share offer from Hybe for a 25% stake that gained little traction with shareholders.

On Friday, shares in SM Entertainment closed at ₩147,800.

Hybe and Kakao agreed to cooperate on matters related to their platforms, Hybe added.

Kakao and SM Entertainment said they welcomed the decision by Hybe.

“Kakao and Kakao Entertainment will continue its tender offer bid until the 26th to secure a further stake and work on the details of business cooperation between Hybe and SM,” Kakao said in a statement.