Sony has rejected a proposal from activist investor Daniel Loeb to spin off its “crown jewel” image sensor business, saying the unit was a “crucial growth driver” for the Japanese technology group.

In an 8-page statement, Sony said its board had unanimously agreed to retain its semiconductor business, citing the costs of separating the business, such as an increase in patent licensing fees and difficulty in recruiting talent.

Kenichiro Yoshida, chief executive of Sony, also defended the firm’s diverse business portfolio ranging from PlayStation games and image sensors used in Apple’s iPhones to films, music and financial services, saying the wide line-up helps the group to remain competitive.

“[The imaging and sensing technology] is the most important technology for enhancing Sony’s corporate value over the long term,” Mr Yoshida said.

The formal rejection came three months after Third Point, Mr Loeb’s hedge fund, launched his second campaign against Sony. In addition to spinning off its image sensor business, Mr Loeb had called on Sony to sell its stakes in non-core assets to focus on being a global entertainment company.

Partly in line with his proposal, the Japanese group last month announced the sale of its stake in medical equipment maker Olympus.

In its response on Tuesday, however, Sony said it would retain its stake in its financial arm, Sony Financial Holdings, and carry out a “comprehensive appraisal” of its equity stakes in other assets such as Spotify and medical information provider M3.

Goldman Sachs and Lazard offered financial advice to Sony, while Nishimura & Asahi provided legal counsel.

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Via Financial Times