Daniel S. Loeb, an American hedge fund billionaire known for starting big fights, has called for a breakup of the entertainment and electronics giant Sony, possibly setting off a battle that could roil Japan’s staid corporate culture, Andrew Ross Sorkin and Michael J. de la Merced report in DealBook. “The call, which came on Tuesday, will most likely be viewed by government officials and corporate leaders in Tokyo as a shot across the bow from Wall Street, just as Western investors begin piling into Japanese stocks.â€
Mr. Loeb is pressing Sony to spin off part of its entertainment arm, which includes a Hollywood film studio and a music label. The investor, who is known for ousting Yahoo’s former chief executive and luring Marissa Mayer away from Google to run the company, also signaled that he would accept a seat on Sony’s board. His hedge fund, Third Point, has amassed a stake in Sony of about 6.5 percent, made up of stock and derivatives and valued at about $1.1 billion, making it one of its biggest shareholders. “Still, even big Japanese investors have often faced resistance in seeking changes at companies, a hurdle that may be significantly higher for a foreign hedge fund manager,†DealBook writes.
Mr. Loeb, 51, flew to Tokyo over the weekend for meetings with government officials, regulators and senior Sony executives, according to people briefed on the matter. He hand-delivered a letter on Tuesday to the company’s chief executive, Kazuo Hirai, that says: “So while Third Point supports your agenda for change, we also believe that to succeed, Sony must focus.â€
A spokesman for Sony, Shiro Kambe, said in a statement that the company welcomes investments. But he also pointed to repeated assertions by Mr. Hirai that Sony Entertainment contributes significantly to the overall company and is not for sale. “We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy,†he said.
MAKING A CASE FOR ONE LEADER AT JPMORGAN  | The debate over whether JPMorgan Chase shareholders should vote to split Jamie Dimon’s roles of chief executive and chairman “has seemingly become about semantics,†Andrew Ross Sorkin writes in the DealBook column. “The person that would most likely become the chairman, Lee Raymond, is already the board’s ‘lead director’ and already performs virtually the same duties that he would with the chairman title.†Mr. Sorkin continues: “If you didn’t think there was enough accountability and adult supervision with him in that role, it’s hard to believe you will think there will be if he becomes chairman. Of course, the board could bring in an outside chairman, but that adds its own series of complications.â€
The machinations around the nonbinding vote ahead of the annual meeting next Tuesday have an “Alice in Wonderland†quality, Mr. Sorkin says. “It may not be popular to say, but the incontrovertible fact remains that JPMorgan is still one of the best-performing banks on Wall Street under Mr. Dimon.†Here is how Barry Diller, the media mogul, framed the situation: “This isn’t about good governance; it’s about busybodies without a clue, trying to do the dumbest thing â€" slapping and shaming a superb C.E.O. for utterly no practical reason.â€
WORRIED CLIENTS CONTACT BLOOMBERG  | Bloomberg L.P. is scrambling to appease nervous customers and shield its lucrative terminal business after revelations that a Bloomberg reporter had used the terminals to monitor a Goldman Sachs partner’s logon activity, Amy Chozick and Ben Protess report in The New York Times. The worried subscribers include JPMorgan Chase, Deutsche Bank, the Federal Reserve, Treasury Department and the European Central Bank.
“The revelations now stretch back to 2011, when UBS complained after a Bloomberg Television host alluded on air to his monitoring of the London-based rogue UBS trader Kweku Adoboli’s terminal logon information to confirm his employment status at the bank. Then, last summer, executives at JPMorgan Chase questioned Bloomberg reporters’ techniques after they were among the first to report on the trader Bruno Iksil, nicknamed the London Whale,†The Times writes. “Bloomberg has now received roughly 20 inquiries about whether reporting practices violated the company’s policies about getting access to subscriber information, including one from Bank of America.â€
ON THE AGENDA Â |Â The Senate Banking Committee holds a hearing at 3:15 p.m. on returning private capital to mortgage markets. BlackBerry has a conference in Orlando. David Tepper of Appaloosa Management is on CNBC at 7:45 a.m. Robert H. Benmosche, the chief executive of A.I.G., is on Bloomberg TV at 8:30 a.m.
BRITISH HEDGE FUND FORGES ITS OWN PATH Â |Â Cantab Capital Partners, a firm based in Cambridge, England, a world away from the fashionable neighborhood of Mayfair in London, has been turning heads recently in London and New York with a new fund that aggressively undercuts its competitors on fees. The fund, which uses computer models to trade on trends in markets around the world, opened to outside investors in the first quarter and grew to more than $600 million by the beginning of April. Unlike rival funds, in which the price of investing is often 2 percent of assets and 20 percent of profits, Cantab charges a 0.5 percent fee and 10 percent of profits for its new fund. That structure has generated buzz in Mayfair at a time when lackluster returns have some big investors wondering whether hedge funds are worth the expense.
Verizon Wireless to Pay $7 Billion Dividend to Parents  | Verizon Wireless said on Monday it would pay Verizon Communications and the Vodafone Group a $7 billion dividend in June, taking some analysts by surprise, Reuters reports. REUTERS
As European Acquisition Struggles, Tata Takes $1.6 Billion Write-Down  | Citing the “weaker macroeconomic and market environment in Europe,†Tata Steel said that it would take a $1.6 billion write-down, mainly stemming from its acquisition of Corus. DealBook »
Dell Demands More Details From Icahn and Southeastern  | Among information the special committee is seeking is a draft of the new proposal and who would run the company if Carl C. Icahn and Southeastern Asset Management succeed. DealBook »
Law Firm Kirkland Builds Its M.&A. Practice  | Kirkland & Ellis has climbed in the ranking of advisers on mergers and acquisitions, working on big deals including the sale of Heinz, Reuters reports. REUTERS
Proxy Advisory Firm Criticizes Goldman’s Compensation Plan  | Glass, Lewis & Company recommended on Monday that shareholders of Goldman Sachs vote against the firm’s executive compensation proposal, as the board “failed to link pay with performance,†Reuters reports. REUTERS
Petrobras of Brazil Sells $11 Billion of Bonds  | The bond sale was the biggest ever for an issuer in an emerging market, Bloomberg News reports. BLOOMBERG NEWS
Paying Top Dollar to Lease Space in a Data Center  | High-frequency traders are willing to pay rents in northern New Jersey several times as high as those in Manhattan, so they can be near crucial data centers, The New York Times writes. “Shorter distances make for quicker trades, and microseconds can mean millions of dollars made or lost.†NEW YORK TIMES
Former Goldman Trader Hires an Additional Lawyer  | Fabrice Tourre, the former Goldman Sachs trader accused of defrauding investors, has retained the veteran litigator John Coffey, The Wall Street Journal reports. WALL STREET JOURNAL
Goldman Sachs’s Head of Australian Cash Equities Said to Retire  |Â
WALL STREET JOURNAL
With the Rise of Family Firms, Private Equity Has a New Rival  | Reuters writes: “From ketchup to hot drinks, family run investment firms are shaking up the consumer deals market, squeezing out private equity players and forcing them to change strategy.†REUTERS
Bain Capital to Buy German Maker of Clutch Systems  |Â
REUTERS
Hedge Fund Rejects Proposal by Hess to End Proxy Fight  | The Hess Corporation said it was prepared to support two of the five nominees put forward by the activist hedge fund Elliott Management, but the proposal was promptly rejected by Elliott. DealBook »
U.S. Hedge Funds Grow Optimistic on Europe  | “While investor sentiment in Europe remains wary, the U.S. smart money is looking for opportunity in the belief that disaster has been averted,†The Financial Times writes. FINANCIAL TIMES
Hedge Fund Titans Gather for Charity  | Steven A. Cohen and Paul Tudor Jones joined other investors at a gala for the Robin Hood Foundation, Bloomberg News reports. BLOOMBERG NEWS
Vince, a Seller of Luxury Apparel, Said to Choose Banks for I.P.O. Â |Â Vince, owned by the fashion firm Kellwood Company, has selected Goldman Sachs and Robert W. Baird & Company to lead its initial offering, Reuters reports, citing two unidentified people close to the situation. REUTERS
China Galaxy Securities Narrows Price Range of I.P.O. Â |Â
REUTERS
Twitter Acquires Start-Up Focused on Data Mining  | Twitter bought Lucky Sort, which is focused on making “huge document sets easier to analyze, summarize and visualize,†AllThingsD reports. ALLTHINGSD
Twitter Expands Partnership With ESPN Â |Â
WALL STREET JOURNAL
Congress’s Role in the I.R.S. Focus on Conservative Groups  | The I.R.S. is supposed to enforce the tax code. Under current law, however, it has little choice but to exercise discretion in the constitutionally dangerous waters of campaign finance, Victor Fleischer writes in the Standard Deduction column. DealBook »
Lehman Demands Millions From Nonprofits  | Nearly five years after filing for bankruptcy, Lehman Brothers “now says it was shortchanged by scores of nonprofits that were forced to pay to exit derivatives that were unwound after the firm filed for Chapter 11 protection,†Bloomberg News reports. BLOOMBERG NEWS
White Collar Watch: An S.E.C. Settlement That Seems to Favor Falcone  | Philip A. Falcone and his hedge fund are not acknowledging wrongdoing as part of a settlement with the S.E.C., and the agency is not even asking for an injunction against Mr. Falcone, Peter J. Henning writes in the White Collar Watch column. DealBook »
Shareholder Lawsuit Against Barclays Over Libor Is Dismissed  |Â
REUTERS
Cyprus Receives First Installment of Bailout Funds  |Â
NEW YORK TIMES
As China’s Economy Stumbles, Government Eyes Reform  | Another set of weak economic data out of China showed that fixed-asset investment slowed, industrial production grew less than projected and retail sales growth was driven almost entirely by consumers taking advantage of the drop in gold prices, Bill Bishop writes in the China Insider column. DealBook »
