Activist Investor Nelson Peltz Eyes New Push for Disney Board Seats After Boosting Stake

Georg Szalai and Alex Weprin
·3 min read
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The activist investor Nelson Peltz is making another play for The Walt Disney Co.

In February, Peltz ended his proxy battle with Disney in a big win for CEO Bob Iger, but with the Hollywood giant’s stock remaining under pressure despite reorganization moves, Peltz is eyeing a renewed push for board seats, according to a source familiar with the matter.

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Peltz’s hedge fund Trian Fund Management, already one of the company’s largest shareholders, has acquired further Disney shares, bringing the value of its stake to more than $2.5 billion. Trian is expected to request multiple seats on Disney’s board of directors, including one for Peltz, the source says.

If Disney does not agree to this, the fund may look to again nominate alternative directors ahead of the Hollywood conglomerate’s annual meeting in the spring. The source added that Trian gave Disney and Iger time to turn the company around after the CEO announced a turnaround plan back in February, but that the stock slump spurred on the decision to make a new board play.

The fund feels the Disney board should strengthen its alignment with shareholders given Disney’s stock has fallen from around $113 in early February to $82.94 as of Friday’s market close.

Peltz abandoned his attempt to win representation on Disney’s board after the company unveiled major cost cuts and other initiatives under Iger. “This was a great win for all the shareholders. Management at Disney now plans to do everything that we wanted them to do,” Peltz said on CNBC back then. However, he also emphasized that Disney and Iger had to deliver on their promises.

Disney back then said: “We are pleased that our board and management can remain focused without the distraction of a proxy contest, and we have tremendous faith in Bob Iger’s leadership and the transformative vision for Disney’s future he set forth.”

It has since then been exploring strategic alternatives for such assets as Hulu, its broadcast business and its Indian operations.

One thing that is not clear in the new Trian effort is whether former Marvel chairman Ike Perlmutter is involved. Perlmutter — a friend of Peltz’s and a fellow Palm Beach resident — was involved in the last proxy fight, and held millions of Disney shares. It is now known how much is stake is currently.

Perlmutter was laid off from Disney’s Marvel Entertainment division (not associated with Marvel Studios) in March.

“I have long expected that my working relationship with Disney would end. That it should come as a result of my trying to help Disney improve its business should sadden many shareholders as it does me, the company’s largest individual shareholder,” Perlmutter said in a statement after the termination.

A spokesperson for Trian declined to comment. The Wall Street Journal first reported Peltz’s new push.

Meanwhile, Sanford C. Bernstein analyst Laurent Yoon last week initiated coverage of the media and telcom sector, with Disney as one of his two favorite stocks, rating it at “outperform” with a $103 stock price target. Calling Disney “the only credible challenger to Netflix,” he said that “we are bullish on Disney’s potential to transition to direct-to-consumer at scale once combined with Hulu.” He added about Hulu: “Disney has more to gain with full control of the asset, and (a) favorable resolution of the deal (with Comcast) will likely lift a modest overhang on the stock.”

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