Exclusive: Loeb’s Third Point building stake to pressure Sony – sources

(Reuters) – Daniel Loeb’s hedge fund Third Point LLC is building a stake in Sony Corp to push for changes that include shedding some businesses, the second time in six years it has targeted the Japanese electronics maker, people familiar with the matter said on Monday.

FILE PHOTO: Daniel S. Loeb, founder of Third Point LLC, participates in a panel discussion during the Skybridge Alternatives (SALT) Conference in Las Vegas, Nevada May 9, 2012. REUTERS/Steve Marcus/File Photo

Once a market leader in consumer electronics, Sony is now in the midst of a turnaround effort spearheaded by Kenichiro Yoshida, its chief executive who formerly served at its chief financial officer.

The maker of the iconic Walkman and Trinitron TV fell behind the likes of Apple Inc in innovation after the release of the iPod in 2001 and the iPhone in 2007. Sony over the past decade has reinvented itself as an entertainment company with stable revenue from music content and its video game platform.

Investors are now searching for its next source of growth as Sony’s gaming business shows signs of slowing, with its popular PlayStation 4 console nearing the end of its cycle.

Third Point’s amassed stake in Sony thus far could not be learned. The hedge fund, which has about $14.5 billion in assets under management, is raising a dedicated investment vehicle, targeting between $500 million and $1 billion in capital, so it can buy more Sony shares, the sources said.

Third Point wants Sony to explore options for some of its business units, including its movie studio, which the hedge fund believes has attracted takeover interest from the likes of Amazon.com Inc and Netflix Inc, the sources said. The hedge fund also wants clarity on how Sony’s semiconductor and insurance divisions fit in with the rest of the company, the sources added.

The sources asked not to be identified because the matter is confidential. Sony and Third Point declined to comment.

U.S.-listed shares of Sony rose 8.3 percent after the Reuters report to close at $46.65. The company, whose main stock market listing is in Tokyo, has a market value of 6.1 trillion yen ($55 billion).

Sony reported lower-than-expected profit in February, dragged down by its previously thriving gaming business, even as a one-off gain related to its acquisition of music publisher EMI pushed the quarterly result to a record high.

Third Point last exited a stake in Sony in 2014 with a roughly 20 percent gain after spending a year and a half pushing for Sony to spin off its entertainment division, writing in a letter to investors that the division remained “poorly managed.”

Some Hollywood actors and producers rallied behind Sony at the time, with actor and producer George Clooney calling Loeb “a hedge fund guy who describes himself as an activist but who knows nothing about our business.”

Later Loeb changed his tune, praising the company for cutting costs at the entertainment division and having made management changes.

CINEMA HITS

Sony has already sold off its ailing personal computer division and streamlined its television and smartphone businesses. In taking aim at Sony’s commitment to the entertainment business, however, Third Point may be facing an uphill struggle.

Yoshida has said he sees synergies between the film business and its PlayStation platform, and he has been emboldened by Sony’s cinema hits such as ‘Jumanji: Welcome to the Jungle,’ and ‘Venom’.

Consolidation in the sector has been intensifying amid pressure from online streaming services offered by companies like Netflix and Amazon, and with Walt Disney Co completing its $71.3 billion acquisition of most of 21st Century Fox Inc’s entertainment assets from Rupert Murdoch’s media empire last month.

Loeb is no stranger to challenging companies with long odds of success. Last year, he sought to oust the entire board of Campbell Soup Co, despite the founding family’s members controlling much of the U.S. food company. He ended up settling for two board seats.

This is the second time Third Point is looking to increase its firepower by raising a special purpose vehicle. In 2017, it raised $750 million that way to build a stake in Nestle SA.

Sony last month said its chairman Kazuo Hirai, who helped engineer the company’s recent revival, would retire in June.

Reporting by Svea Herbst-Bayliss in Boston and Liana B. Baker in New York; Editing by Meredith Mazzilli

Source link

more recommended stories

  • EBay’s strong quarter, robust forecast send shares 5% higher

    (Reuters) – EBay Inc beat analysts’.

  • Twitter reports surprise quarterly user growth, revenue beats

    NEW YORK (Reuters) – Twitter Inc.

  • Tesla says robotaxis coming to U.S. roads next year, slams rivals’ use of Lidar

    SAN FRANCISCO (Reuters) – Chief Executive.

  • Samsung Electronics delays Galaxy Fold media events in China

    SEOUL (Reuters) – Smartphone maker Samsung.

  • Tesla investigating video of parked Model S exploding in Shanghai

    SHANGHAI (Reuters) – U.S. electric vehicle.

  • Toyota establishes research institute in China to study hydrogen, green technologies

    The logo of Toyota is seen.

  • Elon Musk’s SpaceX suffers capsule anomaly during Florida tests

    (Reuters) – Elon Musk’s SpaceX suffered.

  • China releases new rules on game approvals

    People play online games at an.

  • U.S. intelligence says Huawei funded by Chinese state security: report

    (Reuters) – U.S. intelligence has accused.

  • Foxconn recommits to Wisconsin plant, despite governor’s doubts

    President Donald Trump (left) and Rep..

  • Mir card payment system looks beyond Russia

    MOSCOW (Reuters) – After Western sanctions.

  • Qualcomm’s joint venture with Chinese province to shut down: The Information

    FILE PHOTO: A Qualcomm sign is.

  • Pinterest, Zoom shares surge in market debut after IPOs

    (Reuters) – Shares of Pinterest Inc.

  • China’s Guangdong gives Tencent approval to distribute Nintendo’s Switch console

    FILE PHOTO: A Tencent sign is.

  • Pinterest raises $1.4 billion in IPO in sign of sustained demand after Lyft struggles

    NEW YORK (Reuters) – Pinterest Inc.

  • Digital banking startup Aspiration seeks new funding round

    NEW YORK (Reuters) – Aspiration, a.

  • Foxconn’s Gou says will follow order of sea goddess to run for Taiwan presidency

    Terry Gou, founder and chairman of.

  • Apple likens Qualcomm chips to fried chicken as trial begins

    FILE PHOTO: A surveillance camera is.

  • Foxconn’s Gou says may run for Taiwan president, step back from daily business

    TAIPEI (Reuters) – Foxconn’s Chairman Terry.

  • Hulu buys back AT&T’s stake in $1.43 billion deal

    FILE PHOTO: The AT&T logo is.

  • Electronics For Imaging to sell itself to Siris Capital unit

    (Reuters) – Digital printing company Electronics.

  • Asia’s tech champions zero in on main street banking

    HONG KONG (Reuters) – Asia’s internet.

  • Facebook, Instagram, WhatsApp hit by outages – downdetector

    FILE PHOTO: Silhouettes of mobile users.

  • World’s largest plane makes first flight over California

    LOS ANGELES (Reuters) – The world’s.

  • U.S. senators introduce social media bill to ban ‘dark patterns’ tricks

    WASHINGTON (Reuters) – Two U.S. senators.

  • China’s JD.com boss criticizes ‘slackers’ as company makes cuts

    SHANGHAI (Reuters) – Richard Liu, the.

  • Facebook more than doubles Zuckerberg compensation to $22.6 million

    FILE PHOTO: Facebook’s founder and CEO.

  • Dutch PM Rutte: no decisions yet on Chinese role in 5G roll out

    FILE PHOTO: Dutch Prime Minister Mark.

  • Uber unveils IPO with warning it may never make a profit

    NEW YORK (Reuters) – Uber Technologies.

  • Disney CEO Iger takes a dig at social media, says Hitler would have loved it: Variety

    FILE PHOTO: Disney’s Chief Executive Officer.

  • Lyft’s stock slide casts long shadow on Uber’s IPO

    (Reuters) – Uber Technologies Inc may.

  • Lyft shares hit new low as Uber IPO chatter revs up

    FILE PHOTO: Lyft supporters gather for.