NEW YORK ( The Deal) -- Japanese electronics bulwark Sony ( SNE) on Tuesday, Aug. 6, rejected a proposal from activist investor Dan Loeb's Third Point hedge fund to sell off part of its entertainment division, saying the activities were "fundamental" to its business. In an open letter to Third Point, Tokyo-based Sony said its board had unanimously rejected Loeb's demand, It added that it currently had plenty of funds to finance its operations and even if it required capital, it wouldn't sell off an intrinsic part of its business. "Sony's entertainment businesses are critical to our corporate strategy and will be important drivers of growth, and I am firmly committed to assuring their growth, to improving their profitability and to aggressively leveraging their collaboration with our electronics and service businesses," wrote Sony President and CEO Kazuo Hirai. Loeb's Third Point earlier this year increased its minority Sony investment to 7% and began to push for a board seat as well as a partial sale of the entertainment unit, whose recent hits have included The Smurfs 2 and a remake of horror classic Carrie. Loeb had taken aim at the film unit, saying it lacked focus and its margins lagged rivals. The activist investor said Sony's shares could gain as much as 60% if 20% of the entertainment unit were sold to investors. Loeb also wanted the division to have its own board, led by Hirai. Loeb said that the increased transparency that would accompany a listing would encourage the unit to make better capital allocations. Loeb, who is most famous for creating change at beleaguered Internet company Yahoo! ( YHOO), employed Hollywood-level timing in his campaign. He hand-delivered his demands to Sony at a corporate strategy meeting and re-emphasized his wishes ahead of a July shareholders meeting. Sony openly responded to the request and even hired Morgan Stanley ( MS) and Citigroup ( C) to help review options. The company's engagement with Loeb's campaign was seen as a sign Sony CEO Hirai is working to adhere to a new corporate Zeitgeist promoted by Japanese Prime Minister Shinzo Abe. After taking the job in December, Abe said he wanted to introduce more open-door, Western values to the country's clubby corporate sector. The tussle between Sony and Loeb was so public that even prompted actor George Clooney to weigh in. During a Friday television appearance, Clooney said Loeb's focus on the bottom line was dangerous to creative, cyclical industries like film. However, in a letter to the investor, Sony's CEO conceded that the entertainment unit was underperforming its competitors and vowed to release more information on its health. Sony shares slipped 4.6%, or ¥98, to ¥2,039 ($20.70) in afternoon Tokyo trading. Written by Andrew Bulkeley.