Friday, 27 May 2016
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Aug 1 2013 | 10:56am ET
Sony Corp. said today that it is "deepening" its discussions about Third Point's proposals, in spite of media reports that the company will reject the hedge fund's central demand for a partial spin-off of its entertainment division.
Sony announced that it was raising its full-year revenue forecast, thanks to the weakening Japanese yen. And CFO Masaru Kato said that the company is mulling Third Point's suggestions.
"It is an important proposal, and the board will make a decision after having a thorough discussion," Kato said. "The discussions are only midway, and we cannot comment further."
But published reports, including from Nikkei, indicate that Sony will reject an initial public offering for Sony Entertainment. Third Point's Dan Loeb has said that the greater transparency that would come from a spin-off would force the struggling unit to become more efficient.
Loeb has recently turned up the heat in his activist battle, which began cordially with meetings with Sony executives. During the company's conference call for oversees investors today, Loeb asked several questions, including about the profitability of Sony's film unit. Loeb sought to show that the division would not have been profitable without a one-time sale of $106 million in music rights.
Earlier this week, Loeb slammed Sony Entertainment as "poorly managed" and "characterized by a complete lack of accountability and poor financial controls." He also blasted the unit's summer movie releases as historic bombs.