* Third Point's stake in Sony rises to 7 pct from 6.3 pct
* Sony shares jump 4.5 pct, outperform flat Nikkei
* Third Point's assets under management at $13 billion
TOKYO, June 18 (Reuters) - New York-based hedge fund Third Point said it has raised its stake in Sony Corp and urged the Japanese company to create an independent board to run a partially spun-off entertainment arm with Sony's CEO, Kazuo Hirai, as its chairman.
Third Point, a $13 billion hedge fund founded by billionaire investor Daniel Loeb, last month proposed that the struggling electronics maker conduct an initial public offering for its profitable music and movie business. It said such a move could boost Sony's share price by as much as 60 percent.
In a second letter to Hirai on Tuesday, in which he again offered to put a Third Point representative on Sony's board, Loeb added to his proposal by suggesting that Sony adopt "a semi-independent governance structure". Loeb argues that the electronics maker has failed to find the synergies that the shift into entertainment had promised when it bought Columbia Pictures 24 years ago.
Loeb again urged "brisk change" at Sony amid the backdrop of economic changes being wrought by Japan's prime minister that are aimed at ending years of deflation and call for leaner and more agile corporate governance.
"A choice to separate the entertainment unit could be a reasonable idea. Sony may have to make a decision whether to keep the business or to sell off," said Tetsuro Ii, president of Commons Asset Management in Tokyo. "I feel this kind of move is a positive move for the entire Japanese share market."
Sony shares were up 4.5 percent as of 0535 GMT, outperforming the benchmark Nikkei average, which was flat. They have more than doubled since the start of the year and hit a two-year intraday high on May 22.
Sony on Tuesday reiterated that its board would give appropriate consideration to Third Point's spin-off proposal, but declined to comment on the latest letter, which came two days before Sony hosts its annual shareholders meeting in Tokyo.
Third Point said it had increased its stake in Sony to 70 million shares, or about 7 percent, valued at $1.4 billion. That was up from 64 million shares previously, adding pressure on Hirai and his board to take notice of its largest shareholder.
Loeb also welcomed Sony's reported decision to retain financial advisers to help it assess Third Point's proposal. Sony has hired Morgan Stanley and Citigroup to help it look at options for its entertainment business, cable television network CNBC reported in May. Sony declined comment on the report.
The challenge that Hirai faces in reviving Sony's electronics business was highlighted last month when the company scaled down its sales targets for digital cameras and smartphones for the year ending March 2015 by 13 to 17 percent and shrank its operating profit margin goals for its gaming business.
Third Point said it now has 46 million ordinary shares of Sony valued at $944 million and 24 million shares valued at $492 million through cash-settled swaps.