BILLIONAIRE hedge fund investor Daniel Loeb yesterday called on Sony to spin off its lucrative entertainment arm, setting the stage for a clash between his activist Wall Street fund and management at the Japanese electronics maker.
Loeb said his Third Point hedge fund had accumulated a little more than six per cent of Sony’s shares – a stake worth $1.1bn – making it the largest stakeholder in the inventor of the Walkman portable music player and Trinitron TV.
In a letter Loeb personally delivered to chief executive Kazuo Hirai at Sony’s headquarters, the fund manager said Third Point was willing to put up another ¥200bn to back an initial public offering of up to a fifth of the entertainment arm, which includes one of Hollywood’s top film studios and a leading music label.
Loeb, 51, is one of the best known figures in the secretive hedge fund industry with a record of clashing with corporate executives over strategy, including engineering a successful boardroom shake-up at Yahoo last year. In his letter, Loeb endorsed Hirai’s attempts to revive Sony, but said the problems of the company’s electronics business distracted from the value of US-based Sony Entertainment, an asset he called a “hidden gem”.
Loeb said the proposed spin-off of a unit that is home to artists such as Beyonce and Adele and produced movie franchises like Iron Man could add another 60 per cent to Sony’s stock price.
“The entertainment businesses are important contributors to Sony’s growth and are not for sale,” Sony said in response yesterday. “We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy.”