* Shareholders press CEO Hirai for detailed stance on
* Hirai says Sony's board will consider Third Point's
* Sony shares up more than 7 pct since Third Point letter in
By Mari Saito
TOKYO, June 20 Sony Corp shareholders
pressed its chief executive for a response to hedge fund Third
Point's proposal for a partial spinoff of its profitable
entertainment arm but Kazuo Hirai pleaded for patience as
management reviews the bold plan.
Daniel Loeb, the billionaire hedge fund manager of Third
Point and Sony's top shareholder, wants the electronics empire
to sell to the public as much as one-fifth of its entertainment
units and use the proceeds to bolster its struggling hardware
"This is a very big proposal aimed at Sony's important
business," Hirai told more than 10,000 shareholders who gathered
for Thursday's annual general meeting in Tokyo. "I understand
this to be a very important proposal ... It not only involves
what Sony is today but also what Sony should be in the future."
Loeb's suggestion, likely to stay on the radar for months,
strikes at the heart of whether Sony remains both a consumer
electronics maker and a provider of music, movies and TV
"Our entertainment division will remain an important part of
Sony's business," Hirai said. "The board will continue to
discuss Third Point's proposals and we will reach an appropriate
Hirai, 53, maintained his trademark cool throughout
Thursday's gathering, suppressing a laugh when a woman
complimented his good looks, but left shareholders resigned that
there will likely be no quick action by the company.
"He didn't answer the question of what the thinking is
inside management towards Third Point's proposal," said Sony
shareholder Jiro Sugiyama after the meeting.
"I understand the American shareholder's perspective but I
don't think Sony's stance will change. With the electronics
business the way it is, the entertainment business is a
money-maker and they would fear letting go of that."
Hirai said it was important for Sony's board to carefully
consider the proposal and to seek outside input, without rushing
for the sake of reaching a decision quickly.
Sony has long been a pillar of Japan Inc and a pioneer in
the electronics industry. But it has lost market share - and its
innovative edge - to aggressive foreign rivals such as South
Korea's Samsung Electronics Co Ltd and Apple Inc
as they churn out blockbuster products.
Although Loeb's proposal was not on the agenda for a vote at
Thursday's gathering, he is expected to keep pressing his case
with Sony's board and, if no action is taken, will have the
right as a major shareholder to eventually call an extraordinary
Loeb has said he wants to repeat his success last year at
Yahoo Inc, which he took on in a lengthy and eventually
bitter proxy fight that triggered a boardroom shakeout.
"When Loeb went after Yahoo he was pretty persistent. With
Sony he's actually doing it in a rather friendly manner," said
Yasuo Sakuma, portfolio manager at Bayview Asset Management in
"Even if Sony doesn't separate its businesses, if its share
price rises he still wins as a major stakeholder."
Loeb's $13 billion fund said this week it had increased its
stake in Sony to 70 million shares, or about 7 percent.
Sony's share price was little changed after on Thursday,
compared with a 1.8 percent slip in Tokyo's Nikkei benchmark
. Sony's stock has gained more than 7 percent since Loeb
sent his first letter to Hirai with his proposals on May 14,
surging to a two-year high of 2,300 yen in the week that
followed the proposals.
While a recent slide has pared the Nikkei's year-to-date
gains to just 25 percent, Sony shares have more than doubled