May 14 - Billionaire hedge fund manager Daniel Loeb has a $1.1 billion stake in Sony and is calling for a break-up of the Japanese entertainment conglomerate. Conway G. Gittens reports.
The Daily Digit is $1.1 billion. Billionaire hedge fund investor Daniel Loeb is willing to put his money where his mouth is -calling for a break-up of Japanese conglomerate Sony. His Third Point hedge fund owns more than 6 percent of Sony's shares - a stake worth $1.1 billion - making it the largest investor. He is calling on Sony to spin-off its lucrative entertainment arm and is willing to put up another $2 billion to fund an initial public offering, calling the asset a "hidden gem." The proposal: to offer up one-fifth of the unit, which includes a music label with artists like Beyonce and Adele among its roster of stars. Loeb makes his case in a letter to Sony's CEO - saying the electronics business is taking away from the value of U.S.-based Sony Entertainment, which also includes one of Hollywood's top film studios, which is set to release "After Earth" featuring Will Smith and son Jaden. Investors have been calling for a shake-up for years as Sony underperforms many of its peers on the electronics side and those calling for a break-up have found an advocate in Loeb, who successfully promoted change at internet company Yahoo. With Sony, he is obviously setting the stage for a showdown with management of the Japanese conglomerate. But it looks like investors are sensing an opportunity. U.S.-listed shares of Sony, are surging to a 14-month high in late-New York trading.