Sony rejects Daniel Loeb's proposal to spin off entertainment arm Sony Corp. has rejected a proposal by activist investor Daniel Loeb to make a public offering of up to 20% of its entertainment arm. The Tokyo electronics and media giant said in an Aug. 6 letter addressed to Loeb, the chief executive of hedge fund Third Point, that it "unanimously concluded that continuing to own 100% of our entertainment business is the best path forward." Loeb's Third Point owns about 7% of Sony, whose entertainment arm, Sony Entertainment Inc., includes film and television studio Sony Pictures Entertainment, Sony/ATV Music Publishing and Sony Music Entertainment. Loeb, who since May has made multiple public pleas for Sony to adopt his proposal, said in a July 29 letter to Third Point investors that Sony's entertainment arm "remains poorly managed." He also criticized Sony President and CEO Kazuo Hirai for giving "free passes" to Sony Pictures Entertainment's Chairman and CEO Michael Lynton and co-Chairman Amy Pascal. Lynton also is chief executive of Sony Entertainment Inc. Loeb labeled two recent Sony Pictures releases -- the Will Smith action movie "After Earth" and the Channing Tatum vehicle "White House Down" -- "2013's versions of 'Waterworld' and 'Ishtar' back-to-back," a reference to two of the most famous flops of all time. In his Aug. 6 response, Hirai said the company would "increase disclosure regarding Sony's entertainment businesses. We agree this can help market participants analyze their performance and monitor their success. Hirai's letter outlined various advances made by Sony in the last year or so, touting strengths in television production, a revitalization in the electronics business and talent development in the music business. The letter said that having full control of its various entertainment businesses enables Sony to reap the benefits of synergies and drives internal collaboration. "Demand for content is increasing its value in a dynamic industry environment, and we believe our entertainment businesses will increasingly benefit from these trends," Hirai said in the letter. Last week, Sony reported net income of $35 million for its fiscal first quarter, which ended June 30, buoyed by an improvement in its mobile products division and the depreciation of the yen. Third Point did not immediately respond to a request for comment. Sony reports $35-million net profit for first quarter What the Michael Lynton contract renewal means for Sony Activist investor Dan Loeb boosts rhetoric in call for Sony spin-off