Third Point’s Daniel Loeb Seeks Breakup of Sony, N.Y. Times Says

Billionaire Daniel Loeb, founder of U.S. hedge fund Third Point, has called for a breakup of Sony Corp. (6758), the New York Times reported, citing unidentified people familiar with the matter.

Loeb has acquired a 6.5 percent stake in Sony and wants the company to spin off part of its entertainment arm that includes a Hollywood movie studio and music business, the newspaper reported. Sony is checking the report and wasn’t immediately able to comment, spokeswoman Mami Imada said today.

Sony last week forecast a 16 percent increase in profit as it rolls out new Xperia smartphones and Bravia televisions to recapture market share lost to Samsung Electronics Co., while benefiting from a weaker yen. Chief Executive Officer Kazuo Hirai has used job cuts, asset sales, the currency and blockbuster movies to revive earnings after four years of losses as the electronics business struggles to keep consumers.

Loeb flew to Tokyo and hand-delivered a letter to Hirai supporting his turnaround efforts and seeking more action, the newspaper said.

Sony rose 1.2 percent to close at 1,877 yen in Tokyo trading today, extending its gain this year to 96 percent.

Loeb expects that spinning off a portion of the entertainment business could sharpen Sony’s focus and improve profit margins, the newspaper reported. He is also pushing for a spinoff of its insurance unit, the New York times reported.

Photographer: Jacob Kepler/Bloomberg

Daniel Loeb, founder and chief executive officer of Third Point LLC, expects that spinning off a portion of the entertainment business could sharpen Sony Corp.’s focus and improve profit margins, the New York Times reported. Close

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Photographer: Jacob Kepler/Bloomberg

Daniel Loeb, founder and chief executive officer of Third Point LLC, expects that spinning off a portion of the entertainment business could sharpen Sony Corp.’s focus and improve profit margins, the New York Times reported.

TV Forecasts

Sony expects to sell 16 million TVs this fiscal year, up from 13.5 million, as it focuses on ultra-high definition screens that offer resolution four times sharper than conventional models.

The company reiterated its target for the TV operation to post a profit this year after racking up 800 billion yen in losses since 2004.

Hirai’s plan to revive the consumer-electronics business focuses on games, cameras and mobile devices, including the flagship Xperia Z smartphone revealed at January’s Consumer Electronics Show in Las Vegas.

Sony’s electronics operation will turn an operating profit of about 100 billion yen this fiscal year, compared with a loss of 130 billion yen a year earlier, it said last week. Smartphone sales are expected to rise to 42 million units from 33 million units.

In February, Sony previewed the PlayStation 4 video-game console that will go on sale for the year-end holiday season. The company’s first home-gaming machine in seven years will make its debut amid an industry shift toward games played on smartphones and tablets.

Profit at the game unit will be “essentially flat” as the company boosts spending on research, development and marketing, it said. Sales will rise “significantly” on the introduction of the PS4.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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