Aquamarine
Member
The Story:
UPDATE #1:
UPDATE #2:
Background:
Additional Information:
Sony (SNE) board has rejected Dan Loeb's proposal to spin off the company's entertainment ops in an IPO by a unanimous vote.
The company asserts 100% ownership of its entertainment ops is crucial to its success.
Sony shares are down (-2.1% AH).
(Credit: Seeking Alpha)
UPDATE #1:
Third Point plans to continue talks with Sony (SNE) and look at "further options to create value" for shareholders after the latter rejected a proposal from Daniel Loeb's fund to partially list its entertainment arm.
Sony intends to improve transparency at the division, including providing revenue figures for certain categories of its pictures and music segments.
However, Loeb, who holds 7% in Sony, wants the company to provide more specific plans about how it will improve the performance of the unit.
Sony's shares are down (-4.6%) in Tokyo.
(Credit: Seeking Alpha)
UPDATE #2:
Daniel Loeb will reportedly give Sony (SNE) breathing room to show how its content and hardware operations benefit each other, but he wants the company to provide detailed plans and set financial targets for the entertainment division in order to increase accountability.
Loeb, whose Third Point hedge fund owns a 6.9% stake in Sony, expects significant progress by May 2014; in the meantime, he doesn't intend to start a proxy fight and nor is he likely to call a special meeting.
The report comes after Sony's board rejected Loeb's call to partially spin off its entertainment business.
Sony shares are at $20.32 (-1.93%).
(Credit: Seeking Alpha)
Background:
- Daniel Loeb, Hedge Fund Manager of Blue Point (owns 7% of Sony), wants Sony to prioritize its Electronics sector (everything but Finance, Movies, TV, and Music), to "maximize success, reduce burdensome debt and ... provide additional capital."
- Loeb believes that creating a public offering (partial split-off) for Sony Entertainment (Movies, TV, and Music) will result in a "more disciplined management approach" and will put it up to par with its competitors. He has also called the company's entertainment division poorly managed and said he wanted it to be more transparent and accountable.
- Kaz Hirai and other Sony executives were "considering the proposal."
Additional Information:
The letter followed a meeting between Mr. Loeb and Sony’s bankers on July 17, at the hedge fund manager’s Midtown Manhattan offices.
Sony’s chief executive, Kazuo Hirai, wrote in Monday’s letter that the company had considered Mr. Loeb’s proposal of spinning off a portion of the entertainment unit to the public markets. But after consulting with its financial advisers, Sony believed that owning all of the business would let it better mesh with its core electronics operations, without the legal encumbrances that a partial split-off would entail.
Moreover, Mr. Hirai wrote that Sony had considered and dismissed the notion that the company needs the capital that Mr. Loeb’s plan would have generated. Should it need to raise more money, the conglomerate would look to other avenues for financing.
But Mr. Hirai did make one concession, writing that Sony’s entertainment arm will begin disclosing more information about the performance of the business.
Advisers to Sony had also recommended rejecting the proposal because of the tough history of partial spin-offs, according to a person briefed on the matter. A number of companies have tried listing subsidiaries on the public markets, with many having resorted to buying back the operation afterward.
(Credit: Bloomberg)
http://www.bloomberg.com/news/2013-...quest-to-sell-part-of-entertainment-unit.html