Hedge-fund chief Dan Loeb has upped his firm’s stake in Sony and has urged the company to launch an initial public offering of its music and movies wing, the Wall Street Journal reports.
Loeb’s firm, Third Point LLC, recently bought five million more Sony shares. It now holds a total of 70 million shares, nearly 7% of the company.
The Journal obtained a letter from Third Point to Sony CEO Kazuo Hirai asking the company to consider spinning off its entertainment division.
Mr. Loeb, whose Sony stake now amounts to roughly $1.4 billion and makes Third Point one of the company’s largest shareholders, is seeking to ride a wave of potential change in Japan’s traditionally staid corporate sector and in its wider economy. Mr. Loeb has argued that Sony could boost its share price dramatically by following his proposals, which he says would prompt the market to more fully value the company’s entertainment assets.
In the letter, Loeb writes that Sony entertainment lacks the “discipline and accountability” of its contemporaries, and would benefit from the transparency of an IPO and an “expert board with strongly aligned incentives.” Loeb offered to serve on the board.
According to Loeb, an IPO of Sony’s entertainment wing could raise as much as $2 billion.
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