Sony: ‘We’ll think about splitting’
May 22, 2013
Sony says it will assess a proposal from its biggest shareholder, Daniel Loeb’s Third Point hedge fund, that the group should sell up to a fifth of its music and movies business. Loeb argues a partial spin-off of Sony Entertainment would free up cash to help the struggling electronics division and could boost Sony’s stock price by 60 per cent.
Third Point’s “proposal is one that affects a core part of Sony’s business and the direction of our management, so the Sony board will give it thorough consideration before replying,” CEO Kazuo Hirai told a press briefing. Sony has relied on entertainment and insurance profits to offset losses from TVs and other consumer devices.
Sony cut its sales targets for digital cameras, smartphones and tablets by 13-17 per cent for the year to end-March 2015, but said there were “encouraging” signs of a revival in its electronics business.
“While there are encouraging signs of change, the revival of our electronics business remains our task,” Hirai said, pointing to strong demand for Sony’s new Xperia smartphone and mirrorless interchangeable lens cameras. He said Sony was keeping to its strategy to revive the struggling business around cameras and mobile and PlayStation gaming devices.
Hirai, however, slashed his operating profit margin target for the gaming business to 2 per cent in the year to March 2015, from an earlier outlook for 8 per cent. For the current business year, Sony predicts its operating profit will be around 230 billion yen ($2.24 billion), little changed from last year when it booked one-off gains from selling assets including its US headquarters in New York.