TOKYO: Sony chief Kazuo Hirai said Wednesday the company was examining a hedge fund proposal to sell off part of its entertainment unit in a bid to boost profits in its core business.
Hirai told a press conference board members have started discussing the idea raised by key shareholder Daniel Loeb, whose investment fund Third Point suggested spinning off as much as 20 percent of Sony's entertainment arm.
"The proposal by Third Point is a very significant matter that would affect Sony Group's core business and Sony Group's operation," Hirai told reporters at the company's Tokyo headquarters as he gave an update on a medium-term business plan.
"We would like to respond to Third Point after having full discussions at board meetings. At this point, we don't have a schedule as to when we do what," Hirai said, adding that talks among board members have already started. "We are always hopeful that we can engage in positive discussions with shareholders," he added.
He had earlier said the entertainment arm was an integral part of the business and was not for sale.
Sony, like many Japanese companies that came of age in the booming Japan of the 1970s and 1980s, diversified its operations to include seemingly unrelated businesses with few synergies.
Critics say this has left them too big to cope with their more nimble overseas competitors and has led to years of profit bleeding.
Its financial arm, however, which includes banking and insurance operations, has significantly contributed to the firm's bottom line.
Loeb — an outspoken shareholder activist known for his aggressive style in trying to force change at targeted firms — said he supported Hirai's bid to shake up one of Japan Inc.'s best-known names.
Billionaire investor Loeb says his firm is now Sony's largest investor through direct and indirect holdings. Hirai took the helm of the iconic Japanese firm last year.
Earlier this month, Sony reported its first annual net profit in five years, although it was largely driven by a weakening of the yen — which boosts the value of its repatriated foreign income — and a string of asset sales including unloading its Manhattan headquarters.
Hirai said he was on track to bringing Sony's money-losing television business into profitability.
Sony and and domestic rivals Sharp and Panasonic have struggled in the low-margin television business against foreign rivals.
Sony board examines hedge fund spin-off plan
Sony board examines hedge fund spin-off plan
Oil surges as Iran conflict disrupts Middle Eastern supply flow
SINGAPORE: Oil prices surged by as much as 13 percent on Monday after shipping in the crucial Strait of Hormuz was disrupted by retaliatory Iranian attacks following initial bombing by Israel and the US that killed Iranian Supreme Leader Ali Khamenei.
Brent crude futures rose to as much as $82.37 a barrel, the highest since January 2025, before retreating to be up $5.41, or 7.4 percent, to $78.28 by 09:05 am Saudi time.
US West Texas Intermediate crude climbed to an intraday high of $75.33, up over 12 percent and the highest since June, though it later pared gains and was up $4.74, or 7.1 percent, at $71.76.
Both benchmarks jumped as a sustained exchange of counterattacks damaged tankers and sharply disrupted shipmentsin the Strait of Hormuz, a waterway between Iran and Oman that connects the Gulf to the Arabian Sea.
On a typical day, ships carrying oil equal to about one-fifth of global demand from Saudi Arabia, the UAE, Iraq, Iran, and Kuwait sail through the Strait along with tankers hauling diesel and jet fuel and gasoline and other products from their refineries to major Asian markets including China and India.
“Markets are acknowledging the seriousness of the conflict, but are also signalling that, for now, this is a geopolitical shock, not a systemic crisis,” said Priyanka Sachdeva, senior analyst at Phillip Nova.
Prolonged effective closure of the Strait would push oil prices higher and cause shortages in supply to top importers China and India.
More than 200 vessels including oil and liquefied gas tankers have dropped anchor outside the Strait, shipping data showed on Sunday. Three tankers were damaged and one seafarer was killed in attacks on Sunday in Gulf waters.
Asian economies are assessing oil stockpile availability and ways to secure alternative supply. South Korea will offer petroleum from its stockpiles to local industries if supply disruptions are prolonged, while India is exploring alternative shipping routes.
PRICES PARE GAINS
Still, prices pared gains after the steep surge in early Asian trade, which analysts attributed to buyers already factoring a risk premium into prices in anticipation of the conflict.
Brent had risen over 19 percent this year until Friday’s close, while WTI was trading about 17 percent higher.
Amid the conflict, OPEC+ agreedon Sunday to a modest oil output boost of 206,000 barrels per day for April. Every OPEC+ producer is essentially producing at capacity except for Saudi Arabia, RBC Capital analyst Helima Croft said.
The International Energy Agency is in touch with major producers in the Middle East, director Fatih Birol said on Sunday. The energy watchdog coordinates the release of strategic petroleum reserves from developed countries during emergencies.
Globally, visible oil inventories stood at 7.827 million barrels, enough for 74 days of demand, which is near a historical median, Goldman Sachs wrote in a note.
Citi analysts expect Brent to trade between $80 and $90 a barrel this week amid the ongoing conflict.
“Our baseline view is that the Iranian leadership changes, or that the regime changes sufficiently as to stop the war within 1-2 weeks, or the US decides to de-escalate having seen a change in leadership and set back Iran's missiles and nuclear program over the same time frame,” Citi analysts led by Max Layton wrote.
Analysts are also warning retail gasoline prices in the US, the world’s biggest fuel consumer, may break above $3 a gallon because of the conflict, a potentially risky result for President Donald Trump and his Republican Party ahead of midterm elections this November.
US gasoline futures surged by as much as 9.1 percent to $2.496 a gallon, their highest since July 2024, and were last at $2.381 a gallon, up 4.2 percent.
