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Hedge fund investor calls for breakup of Sony: What does Sony own?(Guardian (UK) Via Acquire Media NewsEdge) Sony, the Japanese electronics and entertainment giant, is facing an audacious breakup attempt in a battle that will pitch a Wall street hedge fund manager against the famously staid corporate culture of Japan. The billionaire hedge fund investor Dan Loeb has quietly built up a 6.5% stake in the $18.5bn (pounds 11bn) company, to become its largest shareholder, and is now calling for a radical overhaul of the group. Renowned for stirring up fights with big US companies, Loeb wants Sony to spin off its entertainment arm, which owns the Hollywood studio behind the latest James Bond movie, Skyfall, and one of the biggest record labels in the world, with pop stars such as Beyonce and Adele on its books. After three days of meetings with government officials, regulators and senior Sony executives, Loeb yesterday hand-delivered a letter to Sony chief executive Kazuo Hirai outlining his proposals. The letter struck a more courteous note than his usual missives, apparently in deference to Japanese decorum. Loeb - who has in the past branded spineless board members as country-club-frequenting "socialites" and slammed chief executives as "chief value destroyers" - was full of praise for Hirai's attempts to revive Sony. But, he said, problems in the electronics division detracted from the entertainment group, which he regards as Sony's "hidden gem". "[We] would not have made this substantial investment if we did not believe in a bright future for Sony's global brand, superior technology, and dedicated employees," he wrote. "We are confident that by acting as partners, Sony will grow stronger." Loeb said his hedge fund Third Point would put up yen 200bn (pounds 1.3bn) to support an IPO of Sony Entertainment. He recommended that Sony then sell a 15%-20% stake in that business in a rights offering to existing shareholders. Separately, he proposed that the company should consider selling off its 60% stake in Sony Financial, which sells life insurance policies and has property holdings. That would leave the core electronics arm, which includes Sony's Bravia TV and PlayStation units. This strategy would generate funds to invest in the electronics business and allow the company to reduce its debt pile. Loeb added that it could drive Sony's share price up by as much as 60% "if managed properly". Sony's share price has plunged by more than 85% over the past 13 years, as it has been overtaken in electronics by the likes of Apple, Samsung and LG. The company has already sold off some property and other assets to cover losses in the consumer electronics division, but entertainment is seen to be core to the business. Hirai has a long-held vision of packaging up content and hardware. The company released a statement on Tuesday in response to Loeb's approach: "As [Hirai] has said repeatedly, the entertainment businesses are important contributors to Sony's growth and are not for sale. We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy." Dan Loeb owns a 6.5% stake in Sony, which has seen its share price drop more than 85% over the past 13 years (c) 2013 Guardian Newspapers Limited. |