Sony rejects Loeb proposal for entertainment sale

August 6, 2013
In this May 22, 2013 file photo, Sony's logo is seen outside the company's headquarters in Tokyo. Sony's board has unanimously rejected a U.S. hedge fund manager's proposal that it sell part of its entertainment business, sending the Japanese company's shares down more than 5 percent. In a letter to Third Point CEO Daniel Loeb, Sony says continuing to own 100 percent of the entertainment business is "fundamental" to the company's success. Sony's letter, which it released Tuesday, Aug. 6, 2013, says content is increasing in value and the entertainment business will benefit from the proliferation of new distribution platforms, Internet access and mobile devices.(AP Photo/Itsuo Inouye, File)

(AP)—Sony's board has unanimously rejected a U.S. hedge fund manager's proposal that it sell part of its entertainment business, sending the Japanese company's shares down more than 5 percent.

In a letter to Third Point CEO Daniel Loeb, Sony said continuing to own 100 percent of Sony Pictures and Sony Music is "fundamental" to the company's success.

Besides distributing blockbuster movies such as the James Bond hit "Skyfall," Sony's entertainment units make popular TV shows including "Community" for NBC and "Breaking Bad" for AMC. Notable Sony Music artists include Beyonce, Adele, Bob Dylan and Kenny Chesney. Sony operates 124 pay TV channels in more than 159 countries.

Sony's letter, which it released Tuesday, said content is increasing in value and the entertainment business will benefit over time from the proliferation of new distribution platforms, high-speed Internet access and mobile devices.

Sony's share price sank 5.5 percent to 2,019 yen ($20.60) in Tokyo trading.

Loeb, who is known for shaking up Yahoo Inc., wrote to Sony Corp. in May proposing the sale of up to 20 percent of the movie and music division.

Loeb said money from the sale should be used to strengthen Sony's ailing electronics arm which has suffered for years from intense competition in the global TV manufacturing business.

Sony's initial response was guarded but some analysts embraced the proposal as a way for the company to unlock unrealized value.

Sony said in the letter it can raise money from other sources if needed and reiterated plans to revitalize the electronics operations.

Loeb's Third Point owns about 6.5 percent of Sony.

Explore further: Starz renews deal to get Sony movies through 2021

Related Stories

Starz renews deal to get Sony movies through 2021

February 11, 2013

(AP)—Premium pay TV channel Starz has renewed its agreement to carry movies from Sony Pictures through films hitting theaters in 2021. The deal comes two months after Netflix snatched future Disney movies from Starz, and ...

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

May 14, 2013

The U.S. hedge fund manager renowned for shaking up Yahoo Inc. has set his sights on Sony Corp., proposing that the Japanese electronics giant spin off up to 20 percent of its movie, TV and music division and use the money ...

Sony mulls hedge fund's entertainment sale idea

May 22, 2013

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.

Sony chief says time needed to study proposal

June 20, 2013

Sony Corp. needs more time to study a key proposal from a U.S. hedge fund to spin off a part of its entertainment unit as a way to propel its fledgling revival, the chief executive told shareholders Thursday.

Recommended for you

Tipster talks about Google's Project Soli kit invites

August 31, 2015

Google has its eyes on a future of radar-based technology for hand gestures with wearables, and to a future where you can interact with wearable technology without adding physical controls such as buttons. Your fingers can ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.