The Japanese company responded to Loeb’s June pitch in a lengthy letter.
Below are the most relevant paragraphs from Tuesday’s letter to shareholders.
On June 13, 2019, Third Point LLC (“Third Point”) issued a public letter to investors suggesting that Sony should consider spinning-off and publicly listing our semiconductor business, which would effectively separate Sony into an entertainment company and a semiconductor (technology) company. We appreciate Third Point’s strong interest in Sony and welcome the fact that many people have been reminded of the value and further growth opportunities of that business.
Sony’s Board and management team, along with external financial and legal advisors in Japan and the U.S., conducted an extensive analysis of Third Point’s recommendations.
Following this review, Sony’s Board, which is comprised of a majority of independent outside directors with diverse experience in a variety of industries, unanimously concluded that retaining the semiconductor business (now called the Imaging & Sensing Solutions (“I&SS”) business) is the best strategy for enhancing Sony’s corporate value over the long term. This is based on the fact that the I&SS business is a crucial growth driver for Sony that is expected to create even more value going forward through its close collaboration with the other businesses and personnel within the Sony Group. The Board also reaffirmed that to maintain and further strengthen its own competitiveness, it would be best for the I&SS business to stay within the Sony Group.
In its letter, Third Point described our semiconductor business, which is centered on image sensors, as a “Japanese crown jewel and technology champion.” Sony’s Board and management team share this view and are excited about the immense potential the I&SS business brings Sony. We expect it to not only further expand its current global number one position in imaging applications, but also continue to grow in new and rapidly developing markets such as the Internet of Things (“IoT”) and autonomous driving. We also expect it will contribute to the creation of a safer and more reliable society through its innovative technology.
While Sony’s Board and management team do not agree with Third Point’s recommendation to spin-off and publicly list the I&SS business, we will continue to proactively evaluate Sony’s business portfolio, pursue asset optimization within each business, and supplement our public disclosures as we execute on our strategy to increase shareholder value over the long term.
Read the full letter here.
More to come…