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Disney Board Slate Supported by Activist ValueAct in Information-Sharing Agreement

Major stakeholder Nelson Peltz has given the Walt Disney Company support in its direction battle, but it is currently embroiled in a power battle with a third shareholder. The enormous entertainment conglomerate said that it has reached a deal with ValueAct wherein the activist would convene with investors, provide data to Disney, and endorse the company’s nominees for the board at the subsequent 2024 shareholder assembly. Thanks to its accord with ValueAct, Disney might be spared the pressure of Peltz’s demands for board seats during a contentious proxy season.

Disney Shareholder Disagreement Regarding CEO Support and Director Nominations

Blackwells Capital, a separate shareholder, declared at Disney’s shareholder meeting on Wednesday that it planned to nominate three directors who would “provide constructive support to CEO Bob Iger and complement the board.” Blackwells said it wanted Peltz to no longer use Train to handle his campaign finance management. Since assuming the role of CEO once more at the end of 2022, Iger has been striving to define Disney’s future. The ESPN sports network, studios, theme parks, streaming, and cruises have all been given top priority by him. The company’s share price has fallen to nearly a 10-year low, and some investors, including Train, think that the business is operating too slowly.

Disney Shareholder Conflict Regarding Direction and Nominees for the Board

A few weeks later, in November, Disney announced that it had turned down Peltz’s request to join the board and had instead selected Jeremy Darroch, a former CEO of Sky, and James Gorman, a former CEO of Morgan Stanley. Train has stated in December that Peltz and former CFO Jay Rasulo ought to be on the Disney board, expressing unhappiness of the latter’s composition. A different stakeholder, Ancora Holdings, had said last month that Peltz’s appointment to the board was accepted. Ancora leaders claim that Disney is discussing making the right changes to the company in a letter addressed to other shareholders. “Shareholder representatives or investor-nominated directors” are supposed to oversee the successful implementation of the reforms, according to their statement.

Disney Reacts to the Board Nominations by Blackwells

Disney declared on Wednesday that Blackwells had informed it of its intentions and that, where necessary, a comprehensive evaluation will be given to the applicants. Real estate mogul Craig Hatkoff, venture entrepreneur Lia Solivan, and former Warner Bros. Discovery executive Jessica Shell are the nominees put up by Blackwells. Disney needs ValueAct’s help to persuade other investors to support their slate since the firm is well-known for its ability to work in the background with management.

Iger Applauds ValueAct’s Cooperation; ValueAct Is Confident About Disney’s Stock Price

Iger said, “ValueAct Capital has a track record of cooperation and collaboration with the companies it invests in, and its co-CEO, Mason Morfit, has been very constructive in our discussions last year.” As reported by the Wall Street Journal in November, ValueAct became one of the activist fund’s biggest investors when it bought a sizable but covert stake in Disney. ValueAct positioned itself over the summer, when the Hollywood writers and actors strike had ended and Disney’s stock was trading at roughly eighty dollars. ValueAct thinks that Disney’s consumer goods and theme park businesses alone are worth at least $80 per share, as the Journal has previously reported.

Disney’s Quarterly Results and Their Pursuit of Restructuring

At the conclusion of the previous year, Disney presented a mixed quarterly earnings report in which the firm predicted significant cash flow improvements in addition to significant cost reductions that might support the company’s profits return in the years to come. Disney was perceived as having taken a significant step in response to the requests and attempts for change made by the employees when it divided its earnings into three primary categories. In the history of the corporation, the sports department headed by ESPN was disclosed as a separate division for the first time. Disney also said that it would accelerate its cost-cutting plan, cutting around $2 billion from its content budget while increasing speed by nearly $2 billion to reach an annual total of $7.5 billion. Disney asserted All of this will contribute significantly to free cash flow, which will eventually reach around $8 billion.
According to reports, former Disney execs are trying to gain seats on the board of the purported entertainment juggernaut by working with Isaac Perlmutter. Pelz and Train ended their secret fight in February after Iger said that “everything is on the table” about the group’s 66% ownership in Hulu. Pelz has suggested that Disney should either purchase the entire network or abandon streaming completely.



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