Sony have rejected a proposal from activist shareholder Daniel Loeb to spin off its entertainment divisions, including the music arm, in an effort to revitalise other parts of the business.
According to multiple American sources, Sony rejected the proposal from Loeb hedge fund Third Point LLC to sell as much as 20 percent of the entertainment arm, including music, television and film interests, to free up money for the electronics side of the business. Uncertainty had been growing during Third Point's three-month effort to push its proposal.
Sony CEO Kazuo Hirai said that the company would benefit from retaining all of its entertainment assets in the current dynamic entertainment industry.
In a letter the CEO did address the concerns of Loeb, who owns approximately seven percent in the company and whose Third Party have revamped Yahoo in the past, that profit margins across the entertainment divisions should be higher and that the company were taking steps to reduce costs.
As well as Sony Music the entertainment division is also home to disc manufacturer Sony DADC, Sony Mobile, Sony Pictures, Sony Computer Entertainment and charity Sony Foundation Australia.
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