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11/26/2007
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Dubai's Leader Buys Stake In Sony

A private equity firm owned by Sheikh Mohammed bin Rashid Al Maktoum said in July that it might invest up to $1.5 billion in one or two publicly listed Japanese companies.

Dubai International Capital, a private equity firm owned by the ruler of Dubai, said Monday it has made a "substantial investment" in Sony, the second tech-company investment this month from a Persian Gulf emirate.

Dubai International did not release the dollar amount or the size of the stake. However, experts believe it was less than 5% of Sony. As a publicly listed company, Sony is required to disclose investments of more than 5%. No such disclosure was made.

The investment boosted Sony shares Monday, closing nearly 2% higher at $50.01 on the New York Stock Exchange.

Dubai International, owned by Sheikh Mohammed bin Rashid Al Maktoum, said in July that it might invest up to $1.5 billion in one or two publicly listed Japanese companies, Reuters news agency reported. A $1.5 billion investment in Sony would amount to a 3% stake in the company, which has a market value of $50.9 billion. More than half of Sony is owned by foreign investors.

"Whilst the restructuring process at Sony is well advanced, the recent successful listing of Sony Financial Holdings is evidence of management's ongoing strategy of focusing on capital efficiency and cash generation," Dubai International said in a statement. "The combination of Sony's truly global brand, its leadership in product design and its global footprint will spur the business' medium term growth as it capitalizes on positive underlying trends and emerging technologies."

Sony is in the final year of a three-year restructuring under chief executive Howard Stringer, who took Sony Financial public last month in order to focus on the consumer electronic company's core business. The company last month swung to a quarterly operating profit and raised its full-year forecast.

Other recent purchases of Dubai International include German specialty aluminum products company Almatis, and a 9.9% stake in U.S. hedge fund Och-Ziff Capital Management, Reuters said.

The investment in Sony is the second time this month a government-connected company in a Persian Gulf emirate has bought a stake in a tech company. Mubadala Development, the investment arm of the Abu Dhabi government, invested $622 million in Advanced Micro Devices for an 8.1% stake in the U.S. chipmaker.

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