Report: Sony working with Morgan Stanley and Citigroup to research sale of Entertainment division

Sony is working with Morgan Stanley and Citigroup to research a proposal that would have the company split off part of its Entertainment division, Bloomberg reports.

Bloomberg's report cites "people familiar with the matter," though representatives for the three companies declined to comment.

The proposal was put forward by Third Point LLC CEO Daniel Loeb, who manages the largest owner of Sony stock, which is worth $1.1 billion. In a May 14 letter to Sony president and CEO Kazuo Hirai, Loeb suggested that the company sell 15-20 percent of Sony Entertainment to current shareholders, a move he believes could help the company by rewarding management based on their performance.

At the time, a statement from Sony reiterated that "the entertainment businesses are important contributors to Sony's growth and are not for sale." However, Bloomberg reported last week that the company was considering the proposal, and CEO Kazuo Hirai said that the board would "come to a decision that represents Sony's stance."

Sony reported net profit this year after five straight years of losses and later doubled its earnings forecast. As part of an effort to boost its financial outlook, the company sold its North American headquarters and its "Sony City Osaki" property (pictured above) recently. Its next-gen console, the PlayStation 4, is expected to be released later this year, and the company said that it's not expecting to incur the kinds of major financial losses that it did with the PlayStation 3.