May.22 - Sony’s board says it will assess a proposal from major shareholder Daniel Loeb to sell up to a fifth of the group’s money-making entertainment arm. It’s a radical idea for corporate Japan where change doesn’t come easy. Hayley Platt reports.
Change rarely goes down well in corporate Japan. But Sony's CEO says he will look at a radical idea by major shareholder Daniel Loeb. The billionaire US boss of Third Point hedge fund has a 6 percent stake in the electronics giant and wants Sony to sell up to a fifth of its money-making entertainment arm, which includes singer Adele and the hit franchise "Spider-Man". (SOUNDBITE)(Japanese) SONY CORP CEO, KAZUO HIRAI, SAYING: "Third Point's proposal is one that affects a core part of Sony's business and the direction of our management, so the Sony board will give it thorough consideration and discuss it at length before replying to Third Point." Sony's core business has been struggling to compete with the likes of Apple and Samsung. It's cutting this year's sales targets for digital cameras, smartphones and tablets by up to 17 percent. Loeb believes cash made from the sale could boost the stock price by 60 percent as a share bonanza sparked by the Prime Minister's promise of deflation-busting policies continues. Ben Keen of IHS says Sony's right to consider his suggestion - but must do so carefully. SOUNDBITE: Ben Keen, Chief Analyst, Consumer, Media and Communications, saying (English): "This is a very serious shareholder. It would be a huge step and one which would reverse really the whole strategy of Sony since the late 80s. But the relationship between the content side of Sony and the hardware side has never really proven itself in commercial terms." But in a culture that favours banks and business partners over investors, it's a move that won't come easy. SOUNDBITE: Ben Keen, Chief Analyst, Consumer, Media and Communications, saying (English): "Japanese companies tend to have a very different view of a much longer term view and they don't like making sharp short decisions especially of this kind of magnitude." Sony insists there are "encouraging" signs of a revival in its electronics business. But with two-thirds of its revenue coming from overseas and its biggest investor an American it may have to risk making some form of change.