A boardroom brawl at Disney is expected to be the most expensive shareholder fight ever, and a chance for everyday investors to have a big impact.
Two activist hedge funds—Nelson Peltz’s Trian Fund Management and the smaller Blackwells Capital—are separately going toe-to-toe with Disney to gain spots on its board and challenge the strategy of Chief Executive Bob Iger.
All in, the three parties could spend north of $70 million ahead of an April 3 shareholder vote. They are already shelling out for slick marketing materials, social-media blitzes and the services of proxy solicitors—akin to campaign strategists—who wrangle shareholder support for their clients’ board candidates.
Peltz has launched a proxy fight against Disney, asking investors to nominate him and former Disney Chief Financial Officer Jay Rasulo to replace current board members Michael Froman and Maria Elena Lagomasino. Both Disney’s higher profits, and string of content and partnership announcements, appeared to form a direct rebuttal to Peltz’s concerns about the company.
“The last thing we need right now is to be distracted by an activist or activists that have a different agenda and don’t understand our company,” Disney Chief Executive Bob Iger told CNBC’s Julia Boorstin in an interview Wednesday.
Peltz’s Trian Fund Management said Disney shareholders have lost about $70 billion in value since the activist ended its first campaign in February. Trian said that it spoke to Disney CEO Bob Iger on Thursday and that the company’s board agreed to meet with the investment firm but wouldn’t grant its request for board representation.
Trian controls roughly $3 billion worth of Disney stock and is seeking multiple directors. The activist investor said it plans to take its case directly to shareholders, without specifying what changes it seeks. Disney said in response to Peltz’s announcement that it is moving from a period of fixing to one of building, has a strong balance sheet and continues to refresh its board.
Investors have finally started to notice Disney’s creativity is NOT what it used to be. Now Disney is focused on pushing agendas, not creating memorable stories and characters and it’s becoming widely criticized among the investment meda. The Financial Times, the UK version of the Wall Street Journal is asking, “Can Disney rediscover the magic?” They are questioning the obvious lack of creativity that’s destroying what used to be the greatest creative brand in American business.
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