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Sony chief says time needed to study Daniel Loeb proposal Sony chief says time needed to study Daniel Loeb proposal
(35 minutes later)
Sony needs more time to study a key proposal from a US hedge fund to spin off a part of its entertainment unit as a way to propel its fledgling revival, the chief executive told shareholders on Thursday. Sony needs more time to consider a proposal to spin off a part of its entertainment unit as a way to propel its fledgling revival, the chief executive has told shareholders.
Kazuo Hirai was speaking to a Tokyo hall packed with thousands of investors for an annual general shareholders' meeting, where the proposal from the Third Point hedge fund, led by activist investor and billionaire Daniel Loeb, was high on people's minds. It was the first question from the floor. Kazuo Hirai spoke to thousands of investors at an annual general meeting at Tokyo hall, where the proposal from the Third Point hedge fund, led by activist investor and billionaire Daniel Loeb, was the first question from the floor.
Hirai reiterated his position that Sony takes the proposal seriously and it will be discussed by the company board. But he ruled out a quick decision. The Sony chief reiterated his position – that the company took the proposal seriously and it would be discussed by the board – but ruled out a quick decision. "This is an important proposal that will influence the future of Sony," he said. "This will take time, and we are not going to come to a conclusion for the sake of coming to a conclusion."
"This is an important proposal that will influence the future of Sony," he said. "This will take time, and we are not going to come to a conclusion for the sake of coming to a conclusion."
Loeb has proposed selling up to a 20% stake in Sony's relatively healthy movie, TV and music business.Loeb has proposed selling up to a 20% stake in Sony's relatively healthy movie, TV and music business.
Third Point, one of Sony's top shareholders, said this week it has raised its stake to 6.9% from the 6.5% Loeb had said the fund owned, when it first made the proposal last month. Third Point, one of Sony's top shareholders, said this week it had raised its stake to 6.9% from the 6.5% Loeb had said the fund owned, when it made the proposal last month.
Loeb is best known for instigating a mass shake-up at Yahoo. Loeb, who is best known for instigating a mass shake-up at Yahoo, proposes that the money raised from selling part of Sony's entertainment division be used to strengthen its electronics operations.
He is proposing the money raised from selling a part of Sony's entertainment division be used to strengthen its troubled electronics operations. His proposal was not up for a vote at the near two-hour meeting, which approved new board members and an option on stock options. Sony said more than 10,000 people attended the meeting.
His proposal was not up for a vote at the nearly two-hour shareholders' meeting, which approved new board members and a proposal on stock options. Sony said more than 10,000 people took part in the meeting. Some analysts have called for changes at Sony, similar to those Loeb has suggested. Takao Miyake, a retired shareholder who had attended the meeting, agreed. "I think Sony is caught up in their own ways," he said. "Working with the hedge fund is the only way to survive."
Some analysts have been advocating changes at Sony, similar to those Loeb has suggested. Others were unsure. Takeshi Kawamata, 56, a businessman who owns 100 Sony shares, had not heard about the hedge fund proposal before. He said: "How should we know if we can trust the hedge fund or not?"
Takao Miyake, a retired shareholder who had attended the meeting, agreed. Sony has run into hard times in recent years despite a glorious near seven-decade history as a pioneer of products including the Walkman.
"I think Sony is caught up in their own ways," he said. "Working with the hedge fund is the only way to survive." The Tokyo-based company, which makes the PlayStation 3 and Bravia flat-panel TVs, has fallen behind rivals such as Apple and South Korea's Samsung. It was also battered by natural disasters in Japan in 2011, as well as an unfavourable currency rate, although that disadvantage has lessened with the yen cheapening in recent months. It barely turned a profit for the fiscal year ended 31 March, its first in five years.
Others were unsure. Takeshi Kawamata, 56, a businessman who owns 100 Sony shares, hadn't heard about the hedge fund proposal before. "How should we know if we can trust the hedge fund or not?" Hirai, who took office last year, promised a revival at Sony, focusing on smartphones, digital imaging and games, as well as turning around its loss-making TV operations. Sony is also trying to move into new fields such as medical equipment, having set up a joint venture with Olympus.
Tokyo-based Sony has run into hard times in recent years despite a glorious nearly seven-decade history of having pioneered products, such as the Walkman portable player. The chief executive said Sony has undergone drastic restructuring over the past year, an effort he described as unprecedented. Hirai said liaised frequently with Sony engineers to prevent any brain drain and boost morale. He said he was determined to make sure all products were "fitting of putting S-O-N-Y on them. We want people to say that a world without Sony would be no fun at all."
Sony, which also makes the PlayStation 3 game machine and Bravia flat-panel TVs, has fallen behind rivals such as Apple of the US and South Korea's Samsung.
It was also battered by natural disasters in Japan in 2011, as well as an unfavourable currency rate, although that disadvantage has lessened with the yen cheapening in recent months.
The company barely turned a profit for the fiscal year ended 31 March, its first in five years.
Hirai, who took office last year, promised a revival at Sony, focusing on smartphones, digital imaging and games, as well as turning around its money-losing TV operations. Sony is also trying to move into new fields such as medical equipment, having set up a joint venture with Olympus.
He said Sony has undergone drastic restructuring under his helm over the last year, an effort that he called unprecedented in company history. He said he was talking frequently with Sony engineers to prevent any brain drain and boost morale. He said he was determined to make sure all products were "fitting of putting S-O-N-Y on them."
"We want people to say that a world without Sony would be no fun at all," he said.