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Sony boss says Loeb raised important issues with rejected entertainment sell off plan
By Chris Cooke | Published on Friday 20 September 2013
Sony Corp chief Kazuo Hirai has told the Wall Street Journal that the recent call by activist shareholder Dan Loeb for the Japanese conglom to sell off a slice of its American entertainment business was “actually a good thing”, even though the company’s board ultimately rejected the proposal.
As previously reported, Loeb’s Third Point company has been quietly increasing its stake in Sony Corp, and proposed that the firm float part of the Sony entertainment group, which includes the firm’s non-Japanese movie, TV and music companies, partly to raise funds to help the flagging Sony electronics business, and partly to force the entertainment division to be more open to investors (because it would be directly listed).
Although the Sony Corp top guard have always denied speculation that they might sell their film studios and music companies in the past, they did formally consider Loeb’s proposal before knocking it back. Hirai insists that, despite rejecting Loeb’s plan, he has a good relationship with his shareholder, telling the Journal: “I have a fairly good relationship with the folks from Third Point, including Dan”.
The Sony boss also conceded that “Dan and Third Point shed a light on the entertainment properties that we’ve been trying to shed a light on for the longest time”. Hirai said that profit margins at Sony’s entertainment business should be higher, that the Sony entertainment companies – including Sony Music and Sony/ATV – should be more transparent, and the Sony film studio should refine its movie greenlighting process.
It remains to be seen if those issues are now dealt with, though the wider Sony business is performing better of late, which could reduce shareholder pressure on management in the immediate future.
