A multimillion-dollar battle over Walt Disney’s future will officially end Wednesday when the company is expected to announce that shareholders have rejected two hedge fund bids aimed at shaking 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 warned that it was possible that some shareholders could change their votes.
If Disney prevails, it will be a victory for CEO Bob Iger as he leads the Mouse House in the industry’s transition to streaming.
The company’s largest shareholder, Vanguard Group, and other investors voted in favor of Iger and the 11 other departing directors, people familiar with their votes said.
Disney spokespeople did not immediately respond to a request for comment. Trian and Blackwells had no comment.
The official results will be revealed during Disney’s annual shareholder meeting, which is scheduled to be broadcast live starting at 1 p.m. ET on Wednesday.
Peltz, CEO of Trian Fund Management, and Blackwells between them were seeking five seats on Disney’s 12-person board of directors. Activists claimed the $225 billion media company botched succession planning for its CEO, lost its creative spark and failed to properly exploit new technologies.
The fight 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 the digital future of sports network ESPN.
Both camps have spent millions of dollars on campaigns aimed at convincing voters and have launched public and personal attacks.
Peltz was seeking a board seat for himself and former Disney CFO 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.
Peltz responded at one point that Disney was “stupid” for 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 an article on X that Peltz would be “greatly helpful” to Disney’s board.
Trian was Disney’s fifth-largest shareholder with a 1.76% stake as of Dec. 31, according to LSEG data. The hedge fund’s $3 billion bet on Disney is largely responsible for its underperformance last year compared to its activist peers, according to financial details provided to Reuters by a Trian investor.
Disney shares peaked in March 2021 at $201.91 as the company gained streaming subscribers. The stock price then fell as the streaming division continued to lose 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, driven by positive earnings and initiatives such as a $1.5 billion investment in “Fortnite” maker Epic Games and a sports streaming app with Fox and Warner Bros Discovery. They remain down 39% from their record.
Iger, 72, has secured a series of public endorsements rarely seen in proxy fights. They included George Lucas, the creator of Star Wars, members of the Disney family, Jamie Dimon, CEO of JPMorgan Chase, and Laurene Powell Jobs, founder of Emerson Collective.
Disney also received support from proxy advisory firm Glass Lewis. Another consulting firm, Institutional Shareholder Services, had recommended Peltz, and pension fund giant California Public Employees Retirement System (CalPERS) backed Peltz and Rasulo.
New York Post
