Daniel Loeb’s speculative call for Sony Corp to spin-off its music division is getting some attention from within.
The Third Point head's proposal will reportedly be put to Sony Corp.’s board, unidentified sources tell Japanese daily newspaper Nikkei. The radical suggestion may already be in the process of evaluation.
According to the published article, Sony will likely hire a financial adviser to study the proposal, which could take a month for the board to decide on.
Sony’s shareprice has spiked since Loeb and Third Point on May 14 proposed the corporation spin-off its entertainment assets, which include the world's second-largest recorded-music group Sony Music Entertainment and half of No. 1 music publisher Sony/ATV.
Loeb, who has invested $1.1 billion in Sony to become its biggest investor with 6.5% of the stock, laid out the revitalization strategy in a letter to the Sony board that went public recently. In the letter, Loeb called on CEO Kazuo Hirai to spin off 15%-20% of Sony Entertainment (including Sony Pictures). And with his suggestion of a shakeup, he’s making it clear he’s keen to increase his shareholding.
Loeb argues that the entertainment assets could generate better operating profits under the harsh spotlight of public markets.
In a responding message on May 14, Sony had this to say, “The entertainment businesses are important contributors to Sony’s growth and are not for sale.”
Loeb reportedly met last week with Sony Corp’s CEO Kazuo Hirai to deliver his proposal, and the company's corporate-strategy meeting is understood to have taken place yesterday in Tokyo.
Sony's U.S. listed-shares rose 9% in value on the New York Stock Exchange following Tuesday’s report.