Billionaire Daniel Loeb wants Sony Corp. (6758) to set targets for improving its entertainment business after his plans for a partial sale of the division were rejected, according to a person with knowledge of the situation.
The investor, who runs the Third Point LLC hedge fund, doesn’t plan a proxy fight and probably won’t exercise his right to call a special meeting, said the person, who asked not to be identified because the deliberations are private.
Loeb will probably visit with Sony Chief Executive Officer Kazuo Hirai in the coming months, said the person. Third Point, which controls a 6.9 percent stake in Tokyo-based Sony, expects significant progress in results from the Japanese company by May 2014, the person said.
Sony directors unanimously turned down a proposal by Third Point to sell as much as 20 percent of the film, TV and music unit in an initial public offering, with Hirai telling Loeb in a letter the businesses are integral to Sony’s revival strategy.
Sony American depositary receipts fell 5 percent to $20.67 at 1:45 p.m. in New York after dropping as much as 6.3 percent. They have almost doubled this year.
Daniel Ernst, a Hudson Square Research analyst, downgraded the stock to hold from buy. Sony failed to outline how its content businesses -- film, TV and music -- might benefit from being part of a company that produces televisions, smartphones and other hardware, and vice versa, he said in a note.
Third Point, based in New York, will give Hirai breathing room to accomplish that goal, according to the person. The hedge fund expects Sony to disclose detailed plans for the entertainment division and to set financial targets for which the company can be held accountable, the person said.
Hirai, on the job for 16 months, is pushing his “One Sony” vision to unite mobile devices and TVs with games, music and film content. After posting a profit in smartphones and television sets, Hirai has committed to rejuvenating a film unit that slumped to No. 6 at the U.S. box office this year after being No. 1 last year.
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