On eve of Sony meeting, report says company could discuss spinoff
Sony Corp. is "considering evaluating" a spinoff of its entertainment arm that is being advocated by the hedge fund and Sony shareholder Third Point, according to Japan's Nikkei newspaper.
The news comes a day before a much-anticipated Sony corporate strategy meeting in Tokyo and a week after Third Point proposed that the electronics and media giant make an initial public stock offering of up to 20% of its entertainment arm.
That unit, Sony Entertainment Inc., includes film and television studio Sony Pictures Entertainment, Sony/ATV Music Publishing and Sony Music Entertainment. Third Point, founded by billionaire Daniel Loeb, has a roughly 6% stake in Sony.
Sony's corporate strategy meeting was scheduled well before Third Point made its proposal in a hand delivered letter to Kazuo Hirai, Sony's president and chief executive.
Wrote Loeb, "Many casual observers would be surprised to learn that while Sony is electronics, much of its current value is derived from a hidden gem -- Sony's Entertainment division." He said that an infusion of capital would help Sony with its "burdensome debt" and provide it with the financial resources to improve its electronics business.
A spokesman for Sony declined to comment on the Nikkei report.
Other previously scheduled management meetings will take place around the corporate strategy conference. Michael Lynton, chief executive of Sony Entertainment, will be in Tokyo for those gatherings.
The Nikkei story, titled "Sony's Board To Assess Spinoff Proposal For Entertainment Business," was posted to the publication's English-language website.
Shares of Sony were up more than 9% on Tuesday, closing at $22.91.
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