Break up Sony and sell part of entertainment business: Hedge fund billionaire shocks Japan with letter to CEO of electronics giant

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Andrew Feinberg

White House Correspondent

Billionaire hedge fund manager Dan Loeb has fixed his sights on Sony by calling for an audacious break-up of the Japanese electronics giant.

The activist investor, who owns 6.5 per cent of the group, believes it should spin off Sony Entertainment, which includes one of Hollywood’s leading studios, behind films such as last year’s James Bond movie Skyfall.

According to reports in the US, Loeb flew to Tokyo over the weekend where he hand-delivered a letter to Sony boss Kazuo Hirai outlining his plan.

The brains behind hedge fund Third Point has even offered to put up to 200 billion yen (£1.3 billion) to back a stock market listing.

“Our plan shifts that paradigm and we believe, if managed properly, it could result in as much as 60% upside to Sony’s share price,” Third Point said in a statement.

Loeb is one of the hedge fund industry’s most respected figures and is known for his aggressive investment style, which has rocked some of the largest companies in the world.

In February, he dumped a $375 million (£245 million) stake in Apple after revealing that the technology group was in his top five losing positions during the fourth quarter of 2012.

Third Point’s flagship hedge fund gained 1.4% in April, pushing returns to 10.5% so far this year, and Loeb is known to be keen to invest further in Japan due to the ambitious reform programme being implemented by its Prime Minister Shinzo Abe.

Sony has so far rejected Loeb’s proposal although experts say he is unlikely to drop his interest.