Sony mull entertainment spin-off
Wednesday 22 May 2013
Sony admitted today it could bow to pressure for a break-up of the Japanese electronics giant.
Kazuo Hirai, chief executive of the ailing electronics firm, said the board would give “thorough consideration” to a call from billionaire hedge fund manager Dan Loeb for a spin-off of its lucrative music and movies business Sony Entertainment.
Loeb, whose Third Point hedge fund is Sony’s biggest shareholder, argued last week the move would boost the company’s shares by up to 60 per cent and free up cash to help its struggling electronics division.
Profits from Sony Entertainment have helped to offset losses from TVs and other consumer devices. The business is home to artists such as Taylor Swift and Beyoncé, films including The Amazing Spider-Man and Skyfall, and the TV show Breaking Bad. Sony’s stock jumped to its highest level in more than two years in the wake of Hirai’s admission, closing 5.9 per cent up.
The comments came as the Japanese multinational cut its sales targets for digital cameras, smartphones and tablets by 13-17 per cent for the year ending March 2015.
Sony moved back into profit for the first time in four years earlier this month thanks to the weaker yen and an aggressive cost-cutting drive that saw it sell its New York headquarters for $1.1 billion (£730m). The firm said it expects an operating profit of ¥230 billion (£1.48bn) during the current financial year.
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