Millennium Post

Sony boss’s reply to US hedge fund’s robbery attempt: A polite ‘No’

Sony's chief executive on Friday brushed off suggestions of bitter relations with a US hedge fund boss after the company rejected his call to spin off its entertainment arm.

The affair was widely portrayed as a clash of corporate cultures, pitting a hard-charging foreign billionaire against one of the bedrocks of Japan's staid corporate sector. But on Friday, Kazuo Hirai said there was no acrimony with hedge fund Third Point or its founder Daniel Loeb, known for his aggressive style in forcing change at target companies.

'They hadn't been harassing us,' Hirai said during a wide-ranging discussion with foreign journalists in Tokyo. 'They sent us a very diplomatic letter, as a major shareholder, with some issues and requests... We took their letter and suggestions very seriously.' Sony's chief added that he has had 'numerous' exchanges with Loeb since Sony formally announced in August that it would keep all of the unit, which includes a major music label and a Hollywood movie studio.

Loeb, who said he amassed the largest single stake in the maker of Bravia televisions and PlayStation games consoles, had called on Sony to spin off 20 per cent of the entertainment division to boost profitability. 'He's been very professional with us. I've been very professional with him,' Hirai said.

Loeb is a 'very important and large shareholder and I want to make sure we keep that relationship', he added. The comments came as Hirai reaffirmed the plan to keep the entertainment business within the vast conglomerate, describing it as 'a very vital and important part of Sony Group's overall strategy'.

'It is one of the key pillars of our future growth,' he said. Sony and its domestic rivals including Panasonic and Sharp have been undergoing painful restructurings -- including laying off thousands, selling real estate and closing businesses -- to stem years of record losses largely tied to their electronics units.

Loeb hailed Hirai's efforts to save Sony, but took aim at the entertainment unit, calling it 'poorly managed', 'famously bloated' and with big salaries for 'underperforming senior executives'. 'Drastic -- rather than incremental -- action is required,' Loeb wrote to Sony's chief.

But his battle to change Sony was uphill from the start, and it joined a string of other failed efforts by foreign investors to shake up Japan's cloistered corporate sector.
Next Story
Share it