Formal rejection could come soon, according to Nikkei
Sony’s board is meeting today in advance of Thursday’s earnings call. Insiders expect a more formal rejection from the board soon, according to Nikkei. One knowledgeable individual says that there’s been no formal communication on the matter between the two companies.
The corporation later revealed a return to profits in the first quarter of its 2013-14 financial year.
“As we’ve said before, the Sony Board and management continue to review the Third Point proposal, and we have no comment on this report,” a Sony spokesperson said in a statement.
In May, Third Point’s Daniel Loeb delivered a letter to Sony Corp.’s board strongly urging the company to spin off a large chunk of its U.S.-based entertainment assets into a separate and publicly traded entity. Loeb argued that U.S.-based investors would treat the proposed media and entertainment stock more favorably than Sony Corp.’s Japanese investors, and that proceeds from an IPO could help revive the parent company’s lagging electronics business.
As of last month, Third Point owned roughly 70 million shares in the company, or about 6.9%.
Sony’s stock price started falling at about 10 a.m. PT on Wednesday, and was trading at $21.08 per share on the New York Stock Exchange about an hour and a half later. That is off about 2.6% from Tuesday’s close.
Nikkei’s report comes three days after Loeb publicly slammed Sony’s recent film performance, calling it “perplexing” that Sony CEO Kazuo Hirai “does not worry about a division that has just released 2013″s versions of ‘Waterworld’ and ‘Ishtar’ back-to-back, instead giving free passes” to studio toppers Michael Lynton and Amy Pascal, the “executives responsible for these debacles.”
Referring to flops “After Earth” and “White House Down,” Loeb was responding to Hirai’s comments during this month’s Allen & Co. conference in which Hirai expressed confidence in the entertainment division. Sony bowed “Smurfs 2” on Wednesday. Observers expect the live-action toon to gross in the mid-$30 millions for five days, with at least $100 million anticipated worldwide.
Third Point is a minority stakeholder in Variety Media, along with majority owner Penske Media Corporation.