Sony Corp. has clarified why it rejected a proposal by the U.S. hedge fund Third Point LLC that the electronics and entertainment giant spin off its semiconductor business.
In June, Third Point announced a $1.5 billion investment in Sony and called on it to split off its chip division and list the new company on a stock exchange in order to raise its corporate value.
In a statement released on Tuesday, Sony said its board had unanimously decided to reject the proposal, adding that the chip division is “a crucial growth driver” and “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.
The statement also listed potential downsides to the proposed spinoff, such as increased patent licensing fees, tax inefficiencies and the time required for the new semiconductor firm to make its listing.
Sony also rejected another Third Point recommendation for the company to sell its stake in Sony Financial Holdings Inc., saying that the affiliate’s financial services “share a high affinity with the Sony brand” and that “there is potential to further increase the corporate value of SFH in collaboration with its management.”
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