March 29, 2020

DealBook: Sony Pondering Spinoff Proposal From a Big Investor

Kazuo Hirai, chief of Sony, at a corporate strategy presentation in Tokyo on Wednesday.Kimimasa Mayama/European Pressphoto AgencyKazuo Hirai, chief of Sony, at a corporate strategy presentation in Tokyo on Wednesday.

TOKYO — Sony said on Wednesday that its board was considering a proposal from the hedge fund Third Point to spin off part of its entertainment business, but it emphasized that the discussions were preliminary and that it had not set a time to respond.

Sony, under pressure from Third Point, one of its top investors, to unlock more value from its lucrative entertainment divisions, also said it was on track to return its electronics business to profitability this year.

Related Links



“We will engage in thorough discussions at the board level to decide on Sony’s response,” Kazuo Hirai, the chief executive, said in response to questions at a corporate strategy presentation. “It is an important matter that relates to Sony’s core businesses and management, so the board must hold ample discussions.”

Mr. Hirai said board members were already discussing the proposal, though some of them will be replaced after Sony’s annual investor meeting in June. He declined to say when Sony might respond or to give his views on the proposal, saying the matter was for the board to judge.

“We are still in early stages,” Mr. Hirai said. “But we intend to engage positively with our investors.”

Daniel S. Loeb of Third PointPhil McCarten/ReutersDaniel S. Loeb of Third Point.

It is unclear whether Sony will seriously consider the proposal from Third Point’s manager, Daniel S. Loeb, who is pressing the company to spin off part of its entertainment arm, which includes one of the biggest film studios in Hollywood and one of the largest music labels in the world.

Corporations in Japan, including Sony, have a history of ignoring letters from shareholders calling for overhauls, a former top investor in Sony said.

Mr. Loeb’s hedge fund has acquired roughly a 6.5 percent stake in Sony, making it one of the biggest shareholders. In a letter that was made public, he has proposed that Sony use the money raised from a spinoff to reinvest in its ailing electronics business.

Mr. Hirai, who became chief executive in April 2012, emphasized that even without such a move, Sony was on track to bring its electronics business back into profitability this fiscal year, which runs through next March.

He said Sony still expected sales of 6 trillion yen ($58.3 billion) from electronics and an overall 5 percent operating profit margin, adding that the company hoped its televisions would turn a profit for the first time in a decade.

“The No. 1 mission assigned to me is to bring change to Sony and to revive our electronics business,” Mr. Hirai said. “We are on the offensive.”

Article source: http://dealbook.nytimes.com/2013/05/22/sony-board-considers-breakup/?partner=rss&emc=rss

DealBook: Sony Board Weighs Breakup Proposal

Kazuo Hirai, chief of Sony, at a corporate strategy presentation in Tokyo on Wednesday.Kimimasa Mayama/European Pressphoto AgencyKazuo Hirai, chief of Sony, at a corporate strategy presentation in Tokyo on Wednesday.

TOKYO – Sony said on Wednesday that its board was considering a proposal from a United States hedge fund to spin off part of its entertainment business, but it emphasized that those discussions were preliminary and that it had not set a timetable for a response.

Sony, under pressure from the hedge fund Third Point, one of its top investors, to unlock more value from its lucrative entertainment divisions, also said it was on track to return its electronics business to profitability this year.

Related Links



”We will engage in thorough discussions at the board level to decide on Sony’s response,” the chief executive, Kazuo Hirai, said in response to questions at a corporate strategy presentation. ”It is an important matter that relates to Sony’s core businesses and management, so the board must hold ample discussions.”

Mr. Hirai said board members were already discussing the proposal, even though some of them will be replaced after the company’s annual investor meeting in June. He declined to say when Sony might respond or to give his personal views on the proposal, saying the matter was for the board to judge.

”We are still in early stages,” Mr. Hirai said. ”But we intend to engage positively with our investors.”

Daniel S. Loeb of Third PointPhil McCarten/ReutersDaniel S. Loeb of Third Point.

It is unclear whether Sony will seriously consider the proposal from Third Point’s manager, Daniel S. Loeb, who is pressing the company to spin off part of its entertainment arm, which includes one of the biggest film studios in Hollywood and one of the largest music labels in the world.

Corporations in Japan, including Sony, have a history of ignoring letters from shareholders calling for similar overhauls, according to a former top investor in Sony.

Mr. Loeb’s hedge fund has acquired a stake of about 6.5 percent in Sony, making it one of the biggest shareholders. In a letter that was made public, he has proposed that Sony use the money raised from the spinoff to reinvest in its ailing electronics business.

Mr. Hirai, who took over as chief executive in April 2012, emphasized that even without such a move, Sony was on track to bring its electronics business back into profitability in the current financial year, which runs through next March.

He said Sony still expected sales of 6 trillion yen ($58.3 billion) from electronics and an overall 5 percent operating profit margin, adding that the company hoped its televisions would squeeze out a profit for the first time in a decade.

”The No. 1 mission assigned to me is to bring change to Sony and to revive our electronics business,” Mr. Hirai said. ”We are on the offensive.”

Article source: http://dealbook.nytimes.com/2013/05/22/sony-board-considers-breakup/?partner=rss&emc=rss

Media Decoder: Support for Antipiracy Bill

The entertainment industry threw its weight behind a proposed law that would give law enforcement officials and others new authority to move against Internet sites that traffic without permission in copyrighted material.

The bill was introduced last Thursday in the Senate, with bipartisan support from a group of sponsors that included Senator
Patrick J. Leahy, Democrat of Vermont, and Senator
Orrin G. Hatch, Republican of Utah.

Called the Protect IP Act, for intellectual property, the bill would take aim at foreign-owned sites that trade in pirated material by allowing American authorities to seek court orders directing domestic Internet service providers, search engines and others to stop doing business with them. It would give rights holders new power to act in court against pirates by using streamlined procedures to eliminate sites that have reappeared with different domain names or new owners after a violation.

The Motion Picture Association of America, which represents the major film companies, joined the National Association of Theater Owners and the Independent Film and Television Alliance last Thursday in supporting the proposed law.

“Movie theater operators are acutely aware of the increasingly harmful effects” of piracy, John Fithian, the president of the theater owners association, said in a statement. The statement was a signal that a generally strong alliance between the theater owners and the film studios remained intact, despite strains created by a recent move by some studios to release a handful of films through on-demand services only two months after their theatrical debut. Theater owners have criticized that plan as a threat to their business.

A number of entertainment unions, including the Directors Guild of America and the Screen Actors Guild, also expressed support for the bill.

Article source: http://feeds.nytimes.com/click.phdo?i=392dc3ebe9e912a96f4539c08df966de