Feeds

Sony investor wants to break up firm, re-invest in hardware biz

Loeb's masterplan calls for IPO of entertainment arm

Internet Security Threat Report 2014

Sony’s biggest shareholder wants to break up the firm, spinning off its highly profitable entertainment division to generate more cash to plough into its misfiring hardware biz.

Activist investor Daniel Loeb and his hedge fund Third Point has a 6.5 per cent stake in the venerable electronics giant, amounting to a whopping $1.1bn.

While applauding CEO Kazuo Hirai’s efforts to turn the ailing Japanese firm around, he outlined radical additional steps in a bold letter apparently hand-delivered to the Sony boss.

The centrepiece of Loeb’s grand plan is as follows: “Take public a 15—20 per cent stake in Sony Entertainment, allowing it to thrive independently with the support of the Sony parent company while increasing capital to revitalise Sony Electronics”.

Loeb said Third Point will stump up ¥150bn-¥200bn (£978m-£1.3bn) to support the IPO of the “hidden gem” of Sony Entertainment – home to world class musicians and lucrative Hollywood movie franchises.

He also wants Sony to sell its 60 per cent stake in insurance arm Sony Financial, moves which would effectively slim the firm down to its core hardware business, including PlayStations, cameras, TVs and Xperia smartphones.

While Loeb declined to detail exactly how he would use the extra cash to turn Sony Electronics around, he argued the business has suffered from a lack of focus, claiming its PC and DVD product lines “lack scale and provide commoditised products at high costs to secularly challenged markets”.

“Sony’s Image Sensor business is large, rapidly growing, and profitable, but its contribution is masked by loss-making legacy semiconductor businesses,” he added.

Despite the bold intent, it’s unlikely that Hirai will go for such a major shake-up, given his stated aim has been to turn Sony into an Apple-like business that can provide users with content and hardware to consume it on.

Sony sent the following unequivocal response by way of a statement, to Reuters:

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.

®

Choosing a cloud hosting partner with confidence

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.