TOKYO – 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 to strengthen its ailing device manufacturing unit. Sony rejected the plan, but analysts latched onto the idea as a way for Sony to unlock hidden value.
Sony’s U.S.-traded shares closed up $1.87, or 9.9 percent, at $20.76 on Tuesday after hitting a 52-week high of $22.22 earlier.
In a Tuesday letter to Sony President Kazuo Hirai, first published in The New York Times, Third Point LLC CEO Daniel Loeb suggests that Sony take 15-20 percent of the entertainment unit public by offering current Sony shareholders the opportunity to buy shares in it.
Loeb said that would allow the Japanese maker of PlayStation game machines and Bravia TV sets to fund improvements to its electronics operations and provide existing shareholders with a way to own one of Sony’s profitable businesses more directly.
Sony replied Tuesday that its entertainment business is not for sale, and stressed it is trying to strengthen both that division and its electronics operations.
Despite Sony’s rebuff, analysts hailed the idea.
Pivotal Research Group analyst Brian Wieser said that becoming a separate company would allow Sony’s entertainment division to grow and become more profitable. It also would focus investor attention on its assets, which would take on new value as an acquisition target for media companies.