Sony said on Tuesday that it has rejected a call by Daniel Loeb’s activist hedge fund Third Point to spin off the firm’s semiconductor business.
The company is of the view that retaining the operations “is the best strategy for enhancing Sony’s corporate value over the long term,” it said.
The decision by Sony’s board and management was unanimous, as the chip business, which includes imaging sensors, is a crucial growth driver for the firm, the Japanese firm said in a letter to shareholders on Tuesday, Reuters reports.
“We envisage AI and sensing being used across a wide range of applications such as IoT, autonomous driving, games and advanced medicine, and believe there is a potential for image sensors to evolve from the hardware they are today, to a solutions and platforms business,” Sony said.
Sony is the world’s top supplier of image sensors for smartphone cameras, providing them to most of major global smartphone makers including Apple and Huawei Technologies.
Loeb has called on Sony to spin off its semiconductor business and sell off stakes in Sony Financial, Spotify and other non-core assets, in order to position itself as a leading global entertainment company.
“Sony’s valuation discount is attributable primarily to portfolio complexity, which will be a permanent problem unless it is decisively addressed,” Third Point said in a letter to investors in June.
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