Hedge fund buys 6.9pc of Sony, proposes to spin off film division

Third Point, the hedge fund controlled by billionaire Daniel Loeb, has raised its stake in Sony to 6.9 per cent as it seeks talks with the board on a proposed spinoff of part of its entertainment business.

Funds controlled by Third Point now own 70 million shares through direct ownership and cash-settled swaps, according to a June 17 letter from the investor to Sony chief executive Kazuo Hirai.

Hirai and Sony's board are discussing Third Point's proposal to sell as much as 20 per cent of its music and film assets in an initial public offering, so that it can focus on reviving its consumer electronics earnings.

Loeb offered to meet with Sony directors and bankers and said the company was regaining its edge, citing the new PlayStation 4 game console and Xperia smartphones.

"It's positive for Sony; Loeb is acknowledging Sony's potential," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Tokyo. "It would be good for shareholders if Sony spins off its entertainment unit as it would boost its value."

Spokeswomen for Sony and Third Point declined to comment.

Sony shares rose 4.4 per cent in Tokyo yesterday. The stock has more than doubled this year.