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Home >> Sony Rejects Third Point’s Entertainment Spin-Off Plan
Tokyo — Sony Corporation’s board has rejected the suggestion by investor Third Point to spin off its entertainment businesses in a unanimous vote of its board.
In a letter, Sony’s board and management said they “strongly believe that continuing to own 100 percent of the company’s entertainment businesses is fundamental to Sony’s success, and that a rights or public offering is not consistent with the company’s strategy for achieving sustained growth in profitability and shareholder value.”
In a press release, Sony said the letter sets out a number of reasons, including:
The rejection of the suggested spin-off was not unexpected. It has been the contention of Third Point’s head David Loeb that the entertainment side of Sony’s business was run badly and that the spin-off could help Sony reinvest in its electronics business.
In a statement, Kazuo Hirai, president/CEO of Sony, said, “We are encouraged by our progress as we continue to execute on our One Sony strategy. We have made many changes during my tenure as CEO, and we are confident that we are on the right path. Sony’s entertainment businesses are critical to our corporate strategy and will be important drivers of growth, and I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses. We are determined to pursue sustained growth in profitability and shareholder value, so that we can meet and exceed the expectations of all of our stakeholders.”
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