Sony says it needs more time to consider entertainment spinoff

Sony Corp. Chief Executive Kazuo Hirai said Thursday that the company needs more time for its consideration of a proposal from a prominent shareholder to take its entertainment business public.

Hirai, speaking at Sony’s annual shareholders’ meeting in Tokyo, said the company would not make a quick decision regarding the proposal from hedge fund Third Point, according to the Associated Press.

In May, Third Point, which is led by activist investor Daniel Loeb, proposed that the electronics and media giant make an initial public stock offering of up to 20% of its entertainment arm.

ON LOCATION: Where the cameras roll

“This is an important proposal that will influence the future of Sony,” said Hirai, according to the Associated Press. “This will take time, and we are not going to come to a conclusion for the sake of coming to a conclusion.”

In a May 14 letter to Hirai, Loeb argued that separating the company’s entertainment assets would allow those businesses’ true value to be unlocked.

“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,” Loeb said.

That unit, Sony Entertainment Inc., includes film and television studio Sony Pictures Entertainment, Sony/ATV Music Publishing and Sony Music Entertainment.

PHOTOS: Hollywood Backlot moments

Earlier this week, Third Point upped its stake in Sony from about 6% to roughly 7%. In doing so, Loeb wrote another letter to Hirai that reiterated his proposal and praised Sony for some of its recent successes, including the debut of PlayStation 4. Loeb said that Hirai should serve as chairman of Sony Corp. and the prospective entertainment company.

“Today, Entertainment is a sleeping giant, a multi-platform content business with a global footprint, encompassing leading film and television production, cable networks and music interests,” Loeb wrote Monday.

Sony shares Thursday were down 38 cents, or 1.85%, to $20.11.

ALSO:

Analyst makes case for separating Sony from Sony Pictures

On eve of Sony meeting, report says company could discuss spinoff

Sony shares jump as hedge fund urges IPO of entertainment unit