Bloomberg is reporting that, under pressure from its shareholders, Sony executives and board members have decided to discuss billionaire Daniel Loeb’s proposal for an initial public offering of its entertainment business. Loeb's firm Third Point owns a fair share of Sony stock, giving him some influence over what Sony does. Last week Third Point LLC’s Loeb told executives at Sony that partially spinning off the entertainment assets and selling its insurance decision would bring a higher valuation and raise cash for the company.
The entertainment arm includes Sony's movie and music divisions, but not its games divisions (PlayStation, SOE, etc.). Loeb’s hedge fund currently holds a 6.5 percent stake in Sony, with its shares valued at somewhere in the neighborhood of $1.1 billion. The hedge fund he controls manages $13 billion in holdings.
Sony CEO Kazuo Hirai indicated today at a press conference that they have decided to at least discuss the offer amongst themselves, but did not give any specific timeframe.
"It’s only a start," Chief Executive Officer Kazuo Hirai said. "It’s important that the board will discuss this and come to a decision that represents Sony’s stance."
Hirai declined to give his view on the proposal.
Third Point made the proposal on May 14 to sell as much as 20 percent of the company's entertainment units in an IPO. Loeb said that he would underwrite the IPO and would "backstop" it for as much as $2 billion.
At the team Hirai said the Sony was not interested in spinning off its entertainment unit.
We'll have more on this story as it develops.