He’s Back! Billionaire Investor Wants a Seat at the Disney Table

Earlier this year, billionaire investor Nelson Peltz tried to gain a seat on the Walt Disney Company’s Board of Directors. Eventually, he gave up his proxy battle when Disney CEO Bob Iger decided to eliminate 7,000 employees and save the company more than $5.5 billion in the process. But Peltz was looking for Disney to return the dividend to shareholders.

He told CNBC at the time: 

We look at Disney, and we see the most advantaged consumer company on the planet and we love it. That’s the reason why we’re here. However, the TSR–total shareholder return over one, five, ten years has materially underperformed the S&P, and underperformed the Proxy Peers that the Company selected. They eliminated the dividend that has been in effect for fifty-seven years. Fifty-seven years of a dividend and now it’s gone. And now they want to tell us that everything is going to be great again. We think that we can help. We have a record of helping.

Disney CEO Bob Iger was successfully able to defuse that situation earlier this year, but now Peltz is back, and he owns even more of the Walt Disney Company.

Peltz’s Tiran Fund Management owns $2.5 billion or 1.6 percent of the company. A person familiar with Peltz’s thinking told the Wall Street Journal that Trian believes Disney’s shares are undervalued and the company needs a board that better aligns with shareholder’s values.

Trian is expected to seek multiple seats on the Disney Board of Directors, including one for Peltz. If Disney says no, Trian will nominate its directors and try to rally the vote for them at Disney’s annual meeting next spring.

When Peltz called off his proxy fight earlier this year, he said he expected Iger to follow through on his plan to restructure the company, which he essentially has. Trian and Peltz began their fight under former CEO Bob Chapek, but then Chapek was fired, and the proxy battle continued. But after Iger’s return, Trian complained there was no succession plan.

However, there still isn’t a plan to replace Iger. He recently extended his contract through the end of 2026, but there is no firm line of succession. Plenty of candidates include Co-Chairman of Disney Entertainment Dana Walden and Chairman of Disney Parks, Experiences, and Products Josh D’Amaro. Iger also recently brought Kevin Mayer and Tom Staggs back to the company to help with the potential sale of Disney’s cable television channels and taking ESPN to a streaming-only platform.

But Trian’s current issue with Disney is its stock price. Since Peltz started his proxy battle earlier this year, Disney’s stock has dropped more than 20 percent, costing Trian hundreds of millions. Last week, the stock dipped below $80 for the first time in 14 years.

According to the Wall Street Journal, Trian is known for “encouraging changes,” such as selling underperforming divisions. At Disney, that would be the over-the-air television networks. Rumors have been swirling that Disney has received a $10 billion offer for ABC and other networks and that ESPN will be heading to a streaming-only platform.

It remains to be seen if activist investor Nelson Peltz’s battle for Disney board seats will be successful or if he is looking for more significant changes within the Walt Disney Company again. But it appears that Wall Street likes the idea of Mr Peltz having a board seat, as Disney shares rose after the news broke.

We will continue to update this story at Disney Fanatic.