Sony Corporation (NYSE:SNE) (TYO:6758)’s annual shareholder meeting is tomorrow, and sources have told Reuters that the company won’t be addressing the proposal to partially spin off its entertainment division. Third Point head Daniel Loeb originally made the suggestion, and he isn’t expected to even be at that shareholder meeting tomorrow.
Dan Loeb’s Spin-Off Proposal For Sony
His suggestion was to spin off up to a fifth of Sony Corporation (NYSE:SNE) (TYO:6758)’s profitable entertainment unit. The proceeds from that spin-off would then be used to bolster the company’s hardware division, which has been struggling recently.
Reuters’ Mari Saito reports that the sources who tipped them off about Loeb missing the annual meeting didn’t say why he would miss it. However, they do expect him to keep pressing his case for a spin-off of the company’s entertainment division.
Loeb upped his stake in Sony recently, and earlier this week he sent yet another letter to the company’s CEO urging the company to spin off the division. As one of the company’s major shareholders, he does have the right to call for an extraordinary shareholders’ meeting if he wants to keep pushing the issue, especially since the company is expected to sidestep it at tomorrow’s meeting.
Sony’s Actual Plans For The Meeting
Since Loeb’s proposal is apparently off the table, Saito reports that instead, Sony Corporation (NYSE:SNE) (TYO:6758) shareholders will be focusing on the more mundane aspects of doing business, like management changes. Former CEO Howard Stringer is planning to retire from the chairman post.
At this point, we just don’t know how many of Sony’s shareholders would side with Dan Loeb’s view. At this point, the only voice of support he has is from Jefferies CFA Atul Goyal, who sent a letter to Sony this week. However, instead of urging the company to spin off its entertainment division, he said it should spin off its electronics division instead.
Other Possibilities For Sony’s Meeting
Citi analysts Kota Ezawa and Takahide Kasai issued a report with some other items they see that could possibly be on tomorrow’s agenda. The main item they expect is new financial details on the company’s movies and music operations between April and June, including sales and key performance indicators. They expect more transparency about the company’s financials, especially in movies and music, to have a positive impact on the company’s stock.
As of this writing, shares of Sony were down 3 percent at the New York Stock Exchange.
