Sony mulls hedge fund's entertainment sale idea

May 22, 2013 by Elaine Kurtenbach
Sony President and CEO Kazuo Hirai speaks during a press conference at the Sony Corp. headquarters in Tokyo, Wednesday, May 22, 2013. Hirai said the company's board will discuss a proposal by U.S. hedge fund manager Daniel Loeb to spin off up to 20 percent of its movie, TV and music division. (AP Photo/Itsuo Inouye)

Sony's CEO Kazuo Hirai says the electronics giant's board will discuss a proposal by U.S. hedge fund manager Daniel Loeb to spin off up to 20 percent of its movie, TV and music division.

Hirai was asked about the proposal at a corporate strategy presentation Wednesday. He did not give a timetable for a decision, and would not give his own opinion about the suggestion raised by Loeb, who is CEO of hedge fund Third Point LLC.

"This will be deliberated by the board and we will come up with a response," Hirai told reporters. "We have only just begun to study this."

Loeb said money from the sale could be used to shore up Sony's ailing electronics manufacturing unit.

Hirai said . did not believe Loeb was proposing that Sony make its entertainment business a separate entity, but wants to make that part of the company public.

"It is an important proposal from our shareholder," Hirai said. "We want a constructive dialogue at all times with our shareholders."

Sony initially responded to Loeb by saying its entertainment business was not for sale, though some analysts said the strategy might help Sony unlock value from its wealth of audio and . Sony has fallen behind powerful such as Apple Inc. and . in profitability and innovation.

Hirai, who took over as Sony's president a year ago, outlined various plans for revitalizing Sony's electronics business, focusing on , imaging and games. The company intends to return its TV business to profitability by promoting more expensive large-screen TVs. It will focus on cameras and other imaging products that have "value-added" technology such as image sensors and higher-powered zooms.

Sony President and CEO Kazuo Hirai speaks during a press conference at the Sony Corp. headquarters in Tokyo, Wednesday, May 22, 2013. Hirai said the company's board will discuss a proposal by U.S. hedge fund manager Daniel Loeb to spin off up to 20 percent of its movie, TV and music division. (AP Photo/Itsuo Inouye)

Sony reported its first in five years for the fiscal year that ended in March. Hirai has sought to reinvigorate the once dominant electronics maker by tapping into what he calls Sony's DNA, and ensuring all its products have "wow."

"Creating new markets cannot be done without taking risks," he said. "If we cannot change we cannot grow."

Hirai defended Sony management's handling of its restructuring over the past few years, noting that top executives had given up bonuses for failing to return the electronics division to profitability, and some had taken salary cuts.

Asked if Sony's practice of having some long-serving employees move to a "career development room" amounted to "bullying" of rank-and-file workers, he insisted it did not.

"The career development room is not an office for getting rid of employees but providing re-employment assistance," he said. "We are trying to find new jobs for the employees and we will continue to do so."

Sony's shares jumped 5.9 percent in Tokyo trading to 2,290 yen.

Explore further: Hedge fund boss Loeb lobbies for breakup of Sony (Update 4)

not rated yet
add to favorites email to friend print save as pdf

Related Stories

New Sony president gets shareholder approval

Jun 27, 2012

(AP) — Kazuo Hirai, the former head of Sony's game division, won shareholder approval Wednesday to steer a turnaround at the struggling Japanese electronics giant as its new president and chief executive.

CEO says Sony is on track for comeback

Jan 17, 2013

Sony Corp., the struggling Japanese electronics and entertainment company, is headed in the right direction although its comeback is not yet complete, its chief executive said Thursday.

Sony's Hirai to replace Stringer as CEO in April

Feb 01, 2012

(AP) -- Sony Corp. announced Wednesday that Kazuo Hirai, who leads the company's core consumer products business, will replace Howard Stringer as CEO and president effective April 1, as the electronics and ...

Former Sony CEO Stringer to retire

Mar 11, 2013

Howard Stringer, the first foreigner to lead Japanese electronics giant Sony during some of its most challenging times, has announced he will retire from the struggling firm.

Sony to cut 10,000 jobs, turn around TV business

Apr 12, 2012

(AP) -- Faced with mounting losses, Sony Corp. said Thursday it will slash 10,000 jobs, or about 6 percent of its global workforce, and try to turn around its money-losing TV business over the next two years.

Recommended for you

Bitcoin exchange MtGox to start liquidation process (Update)

4 hours ago

Failed Bitcoin exchange MtGox, whose spectacular collapse hammered the digital currency's reputation, is to be liquidated after a Japanese court on Thursday ordered the start of bankruptcy proceedings, said a lawyer appointed ...

SK Hynix posts Q1 surge in net profit

6 hours ago

South Korea's SK Hynix Inc said Thursday its first-quarter net profit surged nearly 350 percent from the previous year on a spike in sales of PC memory chips.

Zynga founder Pincus leaving operations role

17 hours ago

Online game maker Zynga says company founder Mark Pincus is stepping down as chief product officer, less than a year after he was replaced as the company's CEO.

User comments : 0

More news stories

Review: 'Hearthstone' card game is the real deal

Video game publishers don't take many risks with their most popular franchises. You know exactly what you are going to get from a new "Call of Duty" or "Madden NFL" game—it will probably be pretty good, ...