A proposal for Sony’s to sell a 20 percent stake of its entertainment shares was at the top of the table during the Japanese giant’s annual general meeting in Tokyo. Sony CEO Kazuo Hirai said the company takes the offer to heart but needs to study it without haste. The spin-off proposal was made by Daniel Loeb, an investment activist and founder of Third Point LLC, in order to increase the company’s profits.
Hirai told investors that Sony’s entertainment business, which includes music and movies, is “not for sale.” Still, the CEO said that they will take time to review Loeb’s proposal, which was sent to Sony’s board on Tuesday. Loeb expressed support for “an integrated Sony ecosystem” but continued to reckon the potential of Sony’s entertainment business. “The company’s most valuable untapped synergies lie within entertainment itself,” Loeb wrote.
However, the Third Point CEO could only wait, as shareholder activism is not common in Japan compared to its western counterparts. Hirai also considers Sony’s business entertainment an indispensable part of the company. ‘The entertainment business plays an important role in Sony’s future growth,” he said. Sony’s electronics business has plummeted in the past, mainly because of Japan’s weak currency, but Hirai promised resurgence. Jefferies technology analyst Atul Goyal said that Sony’s electronics business has cost the company of its potential profit. “Sony should spin-off electronics instead of content.”
[via NY Times]