Disney poised to claim victory in bitter Peltz board fight
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[April 03, 2024] By
Dawn Chmielewski and Svea Herbst-Bayliss
LOS ANGELES (Reuters) -A multimillion-dollar, mud-slinging battle over
Walt Disney's future will officially end on Wednesday when the company
is expected to announce that shareholders rejected two hedge fund bids
to shake up the entertainment giant's board.
On Tuesday, Disney secured enough shareholder votes to defeat a
challenge from billionaire investor Nelson Peltz and Blackwells Capital,
sources familiar with the matter told Reuters. The sources cautioned
that there was a possibility that some shareholders may change their
votes.
If Disney does prevail, it will be a victory for Chief Executive Bob
Iger as he steers the Mouse House through the industry's shift to
streaming.
The company's largest shareholder, Vanguard Group, and other investors
had voted in favor of Iger and the 11 other incumbent directors, people
familiar with their votes said.
Spokespeople for Disney did not immediately respond to a request for
comment. Trian and Blackwells had no comment.
Official results will be disclosed at Disney's annual shareholder
meeting, which is scheduled to stream live starting at 10 a.m. Pacific
time (1700 GMT) on Wednesday.
Peltz, CEO of Trian Fund Management, and Blackwells have been seeking
five seats between them on Disney's 12-person board. The activists
argued the $225 billion media company has bungled its CEO succession
planning, lost its creative spark and failed to properly harness new
technology.
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The tussle has been bitter and closely watched, serving as a referendum
on Disney's efforts to reinvigorate its film and television franchises,
make its streaming business profitable and find partners to help build
sports network ESPN's digital future.
Both sides have spent millions of dollars on campaigns trying to
persuade voters and have launched public and personal attacks.
Peltz has been seeking a board seat for himself and for former Disney
Chief Financial Officer Jay Rasulo. Disney said the pair lacked the
necessary skills, offered "nothing new" in their suggestions for
improvement and noted that Rasulo had been passed over to succeed Iger.
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![](../images/040324PIX/busine94.jpg)
Nelson Peltz founding partner of Trian Fund Management LP. speak at
the WSJD Live conference in Laguna Beach, California October 25,
2016. REUTERS/Mike Blake/File Photo
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Peltz at one point responded that Disney was "stupid" in opposing
him, arguing that he was trying to help Iger.
In the final hours before voting closed, billionaire activist
investor Bill Ackman, himself a veteran of proxy contests, said in a
post on X that Peltz would be "greatly additive" to the Disney
board.
Trian was Disney's fifth-biggest shareholder with a 1.76% stake as
of Dec. 31, according to LSEG data. The hedge fund's $3 billion bet
on Disney was largely responsible for its underperformance last year
relative to its activist peers, according to financial details
provided to Reuters by a Trian investor.
Disney's shares peaked in March 2021 at $201.91 when the company was
gaining streaming subscribers. The stock price later fell as the
streaming division kept losing money. Disney's board fired then-CEO
Bob Chapek, bringing Iger back to the helm.
This year, shares have recovered 35% to close at $122.82 on Tuesday,
lifted by positive earnings and initiatives such as a $1.5 billion
investment in "Fortnite" maker Epic Games and a sports streaming app
with Fox Corp and Warner Bros Discovery. They remain down 39% from
their record high.
Iger, 72, secured a string of public endorsements rarely seen in
proxy fights. They included "Star Wars" creator George Lucas,
members of the Disney family, JPMorgan Chase CEO Jamie Dimon and
Emerson Collective founder Laurene Powell Jobs.
Disney also received the backing from proxy advisory firm Glass
Lewis. Another advisory firm, Institutional Shareholder Services,
had recommended Peltz, and pension fund giant California Public
Employees Retirement System (CalPERS) backed Peltz and Rasulo.
(Reporting by Dawn Chmielewski and Svea Herbst-Bayliss; Writing by
Lisa Richwine; Editing by Jamie Freed and Sonali Paul)
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