Sony Corporation originated with an electronics shop set up in 1946 in Tokyo, and was officially christened Sony in 1958. Sony gained a reputation for innovation with the launch of the Betamax videocassette recording format and the introduction of the Walkman in 1979. Although its market share has been eroded by products from Samsung Electronics and Apple.
Sony rules out partial sale of entertainment business
Sony rejected billionaire Daniel Loeb's call to sell a portion of its entertainment business, saying 100 per cent ownership of the film and music units is crucial to the company's success.
The board's decision was unanimous, Sony said yesterday.
The company will begin providing additional disclosure about the entertainment business starting with the current second quarter.
Chief executive Kazuo Hirai is backing a unified business that spans the production of televisions and mobile devices that can combine with music and film content to drive earnings after years of losses from electronics.
Loeb's Third Point built a 6.9 per cent stake in Sony and pushed the board to sell as much as 20 per cent of its entertainment assets in an initial public offering.
"In the last 15 to 20 years that they've owned those businesses, they've yet to show any meaningful synergy with electronics," said Daniel Ernst, an analyst at Hudson Square Research in New York, who has a buy rating on the shares. "The beauty of the entertainment spin plan was that it wouldn't stop them from keeping trying."
Neither Loeb nor Elissa Doyle, a managing director of Third Point, responded to inquiries seeking comment.
Sony fell 4.6 per cent to 2,039 yen (HK$161) in Tokyo yesterday. The stock has more than doubled this year on optimism that Hirai can turn around the company's struggling electronics business.
Sony's financial advisers met with Third Point within the past month and studied at least 30 cases of initial public offerings that began as partial spin-offs and wound up either fully separate or being bought back, according to two people familiar with the matter.
One of the examples was News Corp's spin-off of Fox Entertainment, which was bought back about six years later, one of the sources said. The advisers also disputed some of Loeb's comments about the entertainment business.
"Sony's entertainment businesses are critical to our corporate strategy and will be important drivers of growth," Hirai said.