Sony CEO: ‘Premature’ to Say if Company Will Accept Spinoff Offer
Sony CEO Kazuo Hirai said that it was “premature” to “speculate one way or the other” on whether the company would accept or reject the proposal from the company’s largest shareholder to spinoff as much as 20% of its entertainment assets, including Sony Pictures Entertainment and the music division.
In an interview with CNBC at the AllThingsD conference in Rancho Palos Verdes, Calif., Hirai said that it was “important that the board take a look at this proposal very seriously.” The idea for a spinoff came from Daniel Loeb’s Third Point hedge fund, which has acquired a 6.1% stake in the electronics giant. Loeb delivered a letter to Hirai last month outlining the proposal, which included having Third Point underwriting a public offering.
Even though there are doubts that Sony will ultimately accept such a proposal, seeing value in retaining the entertainment assets as it attempts to revive its electronics business, Hirai said that outside advisers will “assist us in objectively reviewing the proposal.” Bloomberg reported that Sony is working with Morgan Stanley and Citi to explore such a proposal.
“I think that if you look at the value of the entertainment properties for Sony, it has been a great contributor to the bottom line of the group numbers of us,” Hirai said. “We definitely want to make sure that we are able to continue a very successful business in the entertainment space, and that to me is first and foremost the most important priority, and that we continue to be able to work with the entertainment properties so that they can continue to provide a lot of great content to support our electronics business.”
Hirai seemed to reject suggestions that Sony abandon its effort to revive its TV manufacturing, or other electronics, in favor of financial services, which has been a boon to the bottom line. He noted that they have “halved our losses” in electronics, and that it is “a matter of focus and a matter of execution.”
Shares of Sony closed at $20.84 on Thursday, up 3.68% in U.S. trading.
At the conference, Hirai appeared onstage with San Francisco 49ers boss Jed York to talk about the idea of a “connected” sports stadium, incorporating wearable technology and, presumably, incorporating Sony technology. “All the things that we do digitally, I think it takes it a step further,” Hirai said of the idea of moving from devices to wearable computers.
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