Sony will consider a proposal to spin off its entertainment assets to help free up capital, the company's chief executive said yesterday.
Sony weighs entertainment spin-off
Sony will consider a proposal to spin off its entertainment assets, the company's chief executive said yesterday.
The proposal, submitted last week by Daniel Loeb of the US hedge fund Third Point, suggests selling 20 per cent to help free up capital to bring the company's electronics business back to profitability and boost Sony's share price by as much as 60 per cent.
"We will engage in thorough discussions at the board level to decide on Sony's response," said Kazuo Hirai, the Sony chief executive. "It is an important matter that relates to Sony's core businesses and management, so the board must hold ample discussions."
Mr Hirai declined to give a time frame for when the company would make a decision, saying that the matter was for the board to decide.
"We are still at the starting stage," Mr Hirai added. "But we intend to engage positively with our investors."
The company's shares shot up 5.87 per cent on The Tokyo Stock Exchange, the highest in two years after Mr Hirai's comments.
Sony's entertainment arm includes one of the biggest film studios in Hollywood, which produced the Spider-Man and James Bond films and counts Alicia Keys and Adele under its music label, one of the largest music publishers in the world.
"Sony's turnaround is the biggest concern facing us this year," said Mr Hirai, who revised the company's sales targets for its electronics division by up to 17 per cent for the year to end-March 2017.
It is now targeting camera sales of ¥1.3 trillion (Dh46.48 billion) for 2014-15 and expects smartphone and tablet sales of ¥1.5tn with an operating margin of 4 per cent.
"How we respond to the rapidly growing smartphone market is crucial," said Mr Hirai.
The company expects smartphone sales to rise by more than a quarter to 42 million units to the end of March next year. It is vying for the top three spot against competition from the likes of China's Huawei and South Korea's LG Electronics, which manufactures Google's flagship Nexus smartphones.
By the end of the revival plan, Sony's core electronics businesses - camera, mobile and gaming - will account for 65 per cent of revenues and 80 per cent of operating profit.
Sony launched the world's slimmest and first water-resistant tablet in Dubai yesterday. The device will be available in stores by the middle of next month.