After Shareholder Third Point LLC wrote Sony a very respectful letter to the firm’s top tier, encouraging them to sell off the company’s entertainment division to shareholders so the successful divisions could stand out, Sony has rejected the offer, stating that the company’s current path is already yielding results.
The portion of the entertainment division, which includes PlayStation, that’s recently been performing poorly is its Hollywood branch, although said branch has turned a profit in recent times, only falling short in the last quarter.
Sony, however, lead by company boss and former PlayStation head, Kaz Hirai, said the company will stay together, as a whole, adding that it’s the best way to keep the company strong moving forward.
“Demand for content is increasing its value in a dynamic industry environment characterized by emerging distribution platforms and the proliferation of both powerful mobile devices and access to broadband. Sony believes its entertainment businesses will increasingly benefit from these trends, and the Company’s shareholders will benefit from owning all, rather than a part, of these valuable assets,” Sony wrote.
“Full control of Sony’s entertainment businesses drives internal collaboration, facilitates synergies, and allows the Company to be more nimble. Sony believes that the opportunities for collaboration among Sony’s businesses are numerous and increasing, and a rights or public offering would create the need for otherwise unnecessary and burdensome arm’s length intercompany relationships as a result of minority shareholder rights, thereby limiting Sony’s control and strategic flexibility,” it added.
Comment from CEO Kaz Hirai: “We are encouraged by our progress as we continue to execute on our One Sony strategy. We have made many changes during my tenure as CEO, and we are confident that we are on the right path. Sony’s entertainment businesses are critical to our corporate strategy and will be important drivers of growth, and I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses. We are determined to pursue sustained growth in profitability and shareholder value, so that we can meet and exceed the expectations of all of our stakeholders.”