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Sony Board "Discussing" Potential Break Up

"It's only a start"

Recently we reported on an American hedge fund billionaire, Daniel S. Loeb, who had presented Sony with his plans drawn up by his company, Third Point, to break off the entertainment and finance assets and sell them.

At the time Sony responded with a polite but firm statement saying the company would stay in one piece, “We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy.”

Bloomberg is now reporting that the Sony board of directors is discussing Third Point’s proposal.

“The board will discuss this”

“It’s only a start,” said Chief Executive Officer Kazuo Hirai, “It’s important that the board will discuss this and come to a decision that represents Sony’s stance.”

Anaylysts have mixed feelings towards the proposed IPO, “Realistically, it’s not clear whether a spinoff will strengthen Sony,” said Mitsuo Shimizu, a Tokyo-based analyst.

“Sony will consider how to keep control of the company and may be forced to throw a bone to prevent a long, ugly fight,” commented another analyst. “They will try to give up as little as possible and are no doubt receiving advice on how to fight off the aggressor.”

However, since news of of the proposal was leaked, Sony’s shares have risen 22 percent, which may indicate that investors back the deal.

Source: Bloomberg

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8 Comments
  1. bmg_123
    Member
    Since: Feb 2012

    The way this is worded confuses me. This would initiate an IPO for separate companies like for example Playstation, so does that mean that Playstation would still be part of Sony, but with a separate company holding in stock or would it be in essence ‘sold-off’?

    Comment posted on 22/05/2013 at 16:02.
    • bunimomike
      Member
      Since: Jul 2009

      I was thinking that PlayStation would become a company and not just a brand but whatever they think is best. :-)

      Comment posted on 22/05/2013 at 16:05.
      • Tuffcub
        On the naughty step.
        Since: Dec 2008

        The proposal is for Sony Entertainment which comprises of Sony Pictures, Sony Music and PlayStation amongst others – to be sold off via an IPO.

        The Sony Finance group would also be sold off. The money from these would then be used to prop up the rest of Sony.

        Comment posted on 22/05/2013 at 16:23.
      • bunimomike
        Member
        Since: Jul 2009

        Tiny favour to ask (and please ignore if you have done already) but can you include expanded acronyms and initialisms (just with the first time you mention something) so people know what they mean? I didn’t know what IPO meant.

        IPO (Initial Public Offering) … hope I have that correct.

        Comment posted on 22/05/2013 at 16:27.
      • bmg_123
        Member
        Since: Feb 2012

        Cheers TC, makes sense now. Sony Entertainment is a very strong arm of the company, surely it would be better to sell of minor assets like the TV section and focus down on the already proposed ‘One Sony’ thing, hanging onto all of the profitable businesses.

        Comment posted on 22/05/2013 at 16:53.
      • Tuffcub
        On the naughty step.
        Since: Dec 2008

        Sorry, I slip in to the day job sometimes :)

        Comment posted on 22/05/2013 at 17:15.
  2. cam the man
    Member
    Since: May 2009

    Not sure what would be the best outcome for us gamers, both staying as it is and having the playstation brand as a separate company has it’s good and bad points. I hope the Sony board will do the right thing.

    Comment posted on 22/05/2013 at 16:09.
  3. TheShepanator
    Member
    Since: Nov 2009

    Kind of a little bit scary, hopefully if any sort of break up goes ahead everybody’s jobs will be secure and no savage ‘streamlining’ will take place.

    Comment posted on 22/05/2013 at 22:28.

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