Sony Surges on Report of Talks to Sell Vaio PC Business

Sony Corp. (6758) advanced the most in more than eight months in U.S. trading after the Nikkei newspaper reported the company is in talks to sell its personal-computer business to Japan Industrial Partners Inc.

American depositary receipts of Tokyo-based Sony rose 5.6 percent to $16.10 yesterday in New York, the biggest gain since May 21. The shares have declined 6.9 percent this year, as investors weigh prospects for a turnaround at Japan’s largest television manufacturer.

Selling the PC unit, which produces Vaio computers, would advance Chief Executive Officer Kazuo Hirai’s effort to improve results in the electronics group, which has struggled to compete with lower-cost products from China. Sony, which reports third-quarter results tomorrow, reported losses at its units that make PCs, cameras and televisions in the second quarter.

Sony is in discussions to sell the PC business, including the Vaio brand, to Japan Industrial Partners for 40 billion ($393.9 million) to 50 billion yen, Nikkei said. The transaction would result in a loss for Sony in the current fiscal year, according to the report. Japan Industrial, founded in 2002, is a private equity firm that buys units of large Japanese companies.

John Dolak, a spokesman for Sony in the U.S., didn’t respond to a telephone call yesterday seeking comment.

The company on Feb. 3 denied an NHK report it was discussing creating a venture for the PC unit with Lenovo Group Ltd. (992)

Sony is considering various measures for its PC business, Mami Imada, a spokeswoman for the company, said today by telephone.

PC Slump

Unit sales of personal computers had a “significant decrease” in the fiscal second quarter, Sony said on Oct. 31. Sales of smartphones rose 68 percent, helping the division that includes PCs, phones and tablets narrow its loss to 900 million yen from 23.1 billion yen a year earlier. PC revenue increased 1.5 percent.

On a global basis, Sony’s PC market share stood at 1.9 percent at the end of September, down from a peak of 2.5 percent in 2010, according to tracking firm IDC.

“They have tried to have more lower-priced models, but still play mostly in the high-end space, with average prices higher than most of the top 10 PC vendors in the world,” said Jay Chou, a research analyst for IDC.

Sony owns a PC factory in Japan’s northern Nagano prefecture and uses contract manufacturers in China to make Vaio notebook computers, said Misato Suzuki, a Tokyo-based spokeswoman for the company.

Sony has forecast net income of 30 billion yen for the year ending in March. In Tokyo, the shares have advanced 5 percent in the past year.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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