Sony Rejects Hedge Fund Proposal for Chip Biz Spin-Off
Tokyo, Sept. 17 (Jiji Press)--Sony Corp. <6758> in a statement released on Tuesday clarified its rejection of a proposal by U.S. hedge fund Third Point LLC that the Japanese electronics and entertainment giant spin off its semiconductor business.
In June, Third Point announced its 1.5-billion-dollar investment in Sony and called on the company to split off the chip division and list it on a stock exchange in order to raise Sony's corporate value.
Pointing out that Sony's board unanimously decided to reject the proposal, the statement said that the chip division is "a crucial growth driver" for the firm and that "retaining the semiconductor business is the best strategy for enhancing Sony's corporate value over the long term."
The division is closely connected with other operations of the company, such as camera production, Sony added.
It also raised potential downsides to the proposed spin-off, such as increased patent licensing fees, tax inefficiencies and the time required for the new semiconductor firm to make its listing.
[Copyright The Jiji Press, Ltd.]