Sony Corp shares drop after saying no to Loeb proposal

By IVCPOST Staff Reporter

Aug 10, 2013 07:56 AM EDT

The shares of Japan-based Sony Corp suffered a fall after it rejected a proposal by Daniel Loeb of Third Point Llc. Earlier, the activist shareholder had asked the consumer electronics company to sell one-fifth of entertainment arm but Sony said it wouldn't do so. On Tuesday, the rejection caused the company's shares to drop to JPY 2,073 or USD 21.03 which represented a 3% fall.

The entertainment business is the money-making arm of Sony which encompasses its movies, television and music division. Loeb claimed that this division was poorly managed. The Japanese firm, however, wrote Third Point a letter which stated that keeping the entertainment arm would still benefit the company.  "Sony's board of directors has unanimously concluded that continuing to own 100 percent of our entertainment business is the best path forward and is integral to Sony's strategy," the letter said. Loeb acquired a 7% stake in Sony through cash-settled swaps and shares.

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