MUMBAI: Hedge fund manager Dan Loeb whose firm Third Point has quietly increased stake in Sony to 6.5 per cent wants the Japanese consumer electronics and media conglomerate to spin off its business.
Loeb travelled to Japan and delivered a letter. He wants Sony spin off its Entertainment division which is movies, television and music and its financial services division. This way it can focus on its electronics business.
Loeb reports add having had a two-hour meeting in Tokyo with the senior management of the company. He then gave the CEO a letter. He has estimated that a partial spinoff of the entertainment business could bolster the company‘s share price by as much as 60 per cent.
A spokesman for Sony Shiro Kambe said, "We are focused on creating shareholder value by executing on our plan to revitalise and grow the electronics business, while further strengthening the stable business foundations of the entertainment and financial services businesses.
We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy."
Loeb‘s strategy revolves around activism. . Loeb recently was in the news for forcing former Yahoo CEO Scott Thompson to resign over inaccuracies on his resume. He then helped install Marissa Mayer as CEO.
The issue with Sony could turn into a fight. If Sony resists then Loeb could become more aggressive and drop politeness. On the other hand if Sony quietly agrees then it could be seen as bowing to the requests of a shareholder.