Loeb Boosts Sony Holdings, Pressure For Spin-Off

Jun 18 2013 | 11:01am ET

Third Point is ratcheting up the pressure on Sony Corp., boosting its stake in the company and pushing for "brisk change," including a partial spin-off of its entertainment division.

The New York-based activist hedge fund increased its Sony stake to about 7%, it wrote to the company on Tuesday. Sony holds its annual shareholders meeting on Thursday.

Third Point founder Dan Loeb first approached Sony about the split last month. He elaborated on his plan in today's letter, calling for an independent board of directors for Sony Entertainment with Sony CEO Kazuo Hirai as chairman. He also again recommended that Sony add a Third Point representative to its board.

"Although we have not yet been asked to discuss our ideas with the company's investment bankers or board of directors, we would like to do so promptly," Loeb wrote.

Loeb said that Sony has failed to find synergies between its flagship electronics business and the entertainment business, which it acquired 24 years ago. He has suggested selling up to 20% of the business.

Loeb cited what he called a lack of "discipline and accountability" at Sony Entertainment, and wrote, "it seems difficult to argue that Entertainment would not be strengthened by the transparency that comes with public reporting, an active media analyst community evaluating financial performance regularly, and an expert board with strongly aligned incentives."

Sony today said it would consider Loeb's proposals.

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