Sony Corp. said Tuesday its board has decided to reject a proposal by U.S. activist hedge fund Third Point LLC to spin off its profitable semiconductor business, saying the segment is a "crucial growth driver" for the company.

Sony's semiconductor business "is expected to create even more value going forward through its close collaboration with the other businesses and personnel within the Sony group," Sony President and CEO Kenichiro Yoshida said in a letter addressed to the company's shareholders, describing the unanimous board decision.

The New York-based Third Point, which has invested $1.5 billion in Sony, said in June it has urged the company to split the semiconductor segment and list it in Japan to focus more on its entertainment sectors of gaming, pictures and music.

Sony's chip business, including image sensors used in smartphones and digital cameras, helped the company log an operating profit of 230.93 billion yen ($2.14 billion) in the April to June quarter, up 13.4 percent from the year before and a record high for the reporting months.

Third Point, run by U.S. investor Daniel Loeb, in 2013 also urged Sony to sell a stake in its lucrative entertainment business in an initial public offering to raise capital for shoring up its loss-making electronics business. The proposal was rejected by Sony at the time.

By: DocMemory
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