Sony’s board is expected to reject a proposal from activist investor Daniel Loeb, whose fund is the company’s largest shareholder, to spin-off part of its entertainment division, the Nikkei newspaper reported.
Many directors argued, citing a report from financial advisers, that Sony could compete better by maintaining close links between the entertainment and electronics divisions, the Japanese business daily said.
Sony’s board has yet to finalise its position but is leaning toward a rejection, it said.
Daniel Loeb’s Third Point hedge fund proposed in May that the company sell off as much as a fifth of the group’s money-making entertainment arm - movies, TV and music - to free up cash to revive the electronics business.
Sony’s US-listed shares were down 2 per cent at US$21.19 in afternoon trading on the New York Stock Exchange.
Sony declined comment on the Nikkei report, saying in an email to Reuters that its board and management continued to review the Third Point proposal. Third Point did not respond to a request for comment.
Last year Sony was Hollywood’s strongest studio with 16.6 per cent of the US box office. But it released two bombs this summer and its market share has dwindled to 8 per cent so far this year.