Investor Pressures Sony To Spin Off Entertainment Biz
Activist investor Daniel Loeb has upped his stake in Sony Corp. and at the same time has intensified his pressure on the company to spin off its film, TV, and music businesses and sell off a 15-20 percent stake in them to investors. The funds derived from such a sale should be earmarked for bolstering the company's troubled electronics business, Loeb has proposed. In a letter to Sony chief Kazuo Hirai, Loeb said that his Third Point hedge fund had added 5 million shares to its Sony stake, which now stands at 6.9 percent (currently valued at about $1.4 billion) of the total shares. Loeb's letter stated, 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. He also reiterated an offer t serve on the board himself. In its response, Sony appeared open to such discussions, saying, We look forward to continuing constructive dialog with our shareholders as we pursue our strategy. News of Loeb's latest investment in Sony pushed shares of the Japanese conglomerate up 4.41 percent on the Nikkei today (Tuesday). They were up 3 percent on the NYSE at midday.