Wednesday, 17 September 2014
Last updated 10 hours ago
Aug 6 2013 | 1:10pm ET
Sony Corp. has rejected a call by Third Point's Daniel Loeb to partially spin-off its huge entertainment business.
Loeb first approached Sony about a possible initial public offering for Sony Entertainment in May. The two sides met again on July 17 in New York; in the weeks since, Loeb has been increasingly vocal about the need for change at the unit, which he has called "poorly managed" and "characterized by a complete lack of accountability and poor financial controls."
But in a letter to Loeb yesterday, Sony CEO Kazuo Hirai told the hedge fund manager that, after consultation with its financial advisers, the company would remain the sole owner of the business. Hirai added that Sony did not need the capital that a partial spin-off would generate.
Sony did seek to assuage Loeb, promising to disclose more information about the entertainment unit. Loeb had trumpeted increased reporting requirements among the benefits of a partial spinoff.
Third Point said it was "disappointed" by the decision, although it was heartened by the increased transparency. The hedge fund also made clear it is not giving up on Sony, in which it owns a 7% stake, saying it "looks forward to an ongoing dialogue with management and intends to explore further options to create value for Sony shareholders." Third Point also made clear it wants Sony to come up with options to boost the entertainment unit's profitability.
Aug 25 2014 | 11:21am ET
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