One of Wall Street’s most powerful activist investors has trained his sights on Sony for the second time in six years, sending shares in the Japanese conglomerate up on the prospect of a break-up.
Dan Loeb, the head of Third Point Capital, is planning to raise up to $1bn (£770m) to raise its stake in Sony and agitate for change, according to reports.
Mr Loeb waged a campaign for Sony to spin off its entertainment division in 2013, saying the business was under-appreciated and poorly managed compared to its electronics division.
After a three-month campaign, the company rejected the proposal, saying the entertertainment arm - which includes a movie studio and record label - was better off inside the company. Third Point sold its stake booking a 20pc profit.
In recent years, Sony’s shares have soared on the success of its PlayStation 4, but have fallen in recent months as the current generation of games consoles winds down. Last year it replaced its chief executive Kazuo Hirai with Kenichiro Yoshida, a veteran finance executive who has said he views entertainment as an important part of the company’s future.
According to Reuters, Mr Loeb believes that Sony’s movie studio could be a takeover target for Amazon or Netflix, both of which are spending billions investing in original films and TV shows.
Sony shares rose by 7.3pc in New York after the report. Third Point and Sony did not comment.
The Japanese company has been a major player in entertainment since the 1980s when it bought Columbia Pictures and CBS Records, hoping that owning both electronics such as the Walkman and the content that was played on them would prove fruitful. However, the company has fallen behind the likes of Apple in electronics, with its video game division becoming its highest earner.
Mr Loeb, who has become notorious for his brash activist style, engineered a management clear-out at Yahoo before selling Third Point’s stake for a $520m profit in 2013.