In Activist Battle, Disney Reveals Its Own Reinforcements Ahead of Shareholder Meeting

Georg Szalai
·3 min read
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In the latest turn in a pitched activist investor battle, Disney secured the backing of shareholder and Mason Morfit-led firm ValueAct Capital Management as CEO Bob Iger looks to fend off a challenge from an activist investor, a former Disney CFO and an ousted Marvel mogul. Meanwhile, other investment firms are circling with their own opportunistic moves ahead of the yet-to-be-scheduled shareholder meeting.

Disney and ValueAct have entered into a “confidentiality agreement that enables the company to provide information to the investment firm and consult with ValueAct on strategic matters, including through meetings with the Disney board and management,” the company said Wednesday.

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As part of the arrangement, ValueAct also confirmed that it would support the Disney slate of nominees for the company’s board of directors at its upcoming annual shareholder meeting. The news comes amid Disney’s proxy battle with Nelson Peltz and his firm Trian Partners, an effort backed by ousted Marvel mogul Ike Perlmutter.

Trian’s stake in Disney is valued at around $3 billion. The size of ValueAct’s stake hasn’t been detailed.

In December, Trian nominated Peltz and former Disney CFO James Rasulo to the Hollywood company’s board, arguing that Disney “has woefully underperformed its peers and its potential.” Last year, Disney’s stock eked out a slight gain but remained below its pre-pandemic share price in 2019.

In reply, Disney lauded ValueAct for its “extensive experience investing in media and technology companies navigating significant business transformations, including Spotify, The New York Times, 21st Century Fox, Nintendo, Microsoft, Adobe and Salesforce.”

Said Disney CEO Bob Iger: “ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its co-CEO Mason Morfit has been very constructive in the conversations we’ve had over the past year. We welcome their input as long-term shareholders.”

In backing the Iger-run Disney, Morfit said: “Disney is the world’s leading entertainment company. It has the best intellectual property, sports brand and parks & experiences assets in the industry. As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward. We could not be more excited to partner with Bob and the board to help create long-term sustainable shareholder value.”

Disney also noted that investment firm Blackwells Capital LLC intends to nominate three board member candidates — Jessica Schell, Craig Hatkoff and Leah Solivan — at its undated shareholder meeting. Disney has previously said that it had confidence in its current slate of board members, so it’s unclear if the entertainment company views this move as supportive to its aims. While Blackwells exec Jason Aintabi added, “We call on Mr. Peltz to end his peacocking so that Disney can focus on its bright future,” a nod to backing Iger, while his investment firm’s move may be an opportunistic one to add its own members to the studio’s board.

The activist investor fight picked up steam in December when Peltz enlisted former Disney CFO Jay Rasulo to his team. In joining Peltz’s Trian activist effort, Rasulo had said at the time that “the Disney I know and love has lost its way.” He added: “As independent voices in the boardroom, Nelson and I are confident that the combination of my decades of experience at Disney, Nelson’s significant boardroom skills and history of driving positive strategic change, and our combined consumer brands expertise and financial acumen, will be additive to the Disney board.”

The ex-Disney CFO is part of Peltz’s second proxy fight in as many years. The investor backed away last year after Iger returned to Disney as CEO and outlined plans to cut costs and restructure the company’s operations. Peltz said at the time that things were moving in the right direction.

Following his latest challenge, Disney argued that Peltz’s effort was spurred by former Marvel chairman Perlmutter — officially ousted by the company last March — whose shares comprise the majority of Trian’s voting stake.

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