Sony Entertainment Spinoff Sought by Hedge Fund Shareholder

Sony Entertainment Spinoff Sought Hedge Fund

Third Point offers $2 billion to back IPO

Hedge fund manager Daniel Loeb is calling on Sony Corp. to sell its entertainment division in an effort to boost the stock price of the struggling Japanese electronics giant.

Loeb, an American investor who leads hedge fund Third Point, penned a letter (read here)  to Sony CEO Kazuo Hirai urging he break up the company, as first reported in The New York Times. “While Third Point supports your agenda for change, we also believe that to succeed, Sony must focus,” he wrote, in addition to meeting with senior Sony officials in Tokyo over the weekend.

He also suggested interest in spending as much as $2 billion to back an IPO of the entertainment division, which includes studio Sony Pictures and music label Sony Music, via returning as much as 15-20% of the unit to shareholders. Third Point itself owns as much as 6.5% of the company.

A rep for Sony denied the company is for sale, an assertion that has come from the company in recent months as it struggles to contain costs and reverse a decade-long slide. Earlier this year, an analyst suggested Sony’s entertainment division would be a good merger target for CBS Corp.

Shares of Sony were up 4.4% in pre-market trading early Tuesday.

Loeb has a history of agitating for change at huge companies to improve their fortunes; he led the effort to oust a previous management regime at Yahoo and lured current CEO Marissa Mayer to lead a turnaround at the company.

Disclosure: Third Point backed the acquisition of Variety by Penske Media Corporation last year.

Filed Under:

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety

Loading