Sony Board Rejects Investor’s Call to Spin Off Semiconductors

Sony’s board voted unanimously to keep its semiconductor operations inside the Sony group, rejecting calls from hedge fund Third Point to spin off the chips business into a stand-alone public stock, said CEO Kenichiro Yoshida in a shareholder letter Tuesday. The "valuation discount" in Sony’s stock is “attributable primarily to portfolio complexity, which will be a permanent problem unless it is decisively addressed,” said Third Point, a $1.5 billion Sony investor, in a June 13 letter to shareholders. But Sony’s board, after a 90-day review, decided keeping the semiconductor business “is the best strategy for enhancing Sony’s corporate value over the long term,” said Yoshida. The chips 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,” he said. The board and management team “are excited about the immense potential” the semiconductors business brings Sony, he said. “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 IoT, autonomous driving and artificial intelligence, said Yoshida. Third Point declined comment Tuesday.