Disney gains major support from investment firms to stave off Nelson Peltz

Disney has gained support from two key players as it attempts to stave off a proxy fight from activist investor Nelson Peltz, who has emerged as a persistent critic of Chief Executive Bob Iger’s leadership.

But the firms offered significantly divergent ideas of how they would work with Disney.

Investment firm ValueAct Capital Management — a Disney shareholder — on Wednesday said it will back Disney’s nominees for its board of directors at the company’s upcoming shareholder meeting this year. Disney said it had reached a confidential information-sharing agreement with ValueAct.

“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,” Iger said in a statement. “We welcome their input as long-term shareholders.”

Separately, another Disney shareholder, Blackwells Capital, said it has nominated three executives for Disney’s board but has vowed to reinstate any incumbent board members who may have been outvoted by its nominees, while also blasting Peltz’s campaign.

The Blackwells nominees are former Warner Bros. executive Jessica Schell, Tribeca Film Festival co-founder Craig Hatkoff and former TaskRabbit Chief Executive Leah Solivan.

“We call on Mr. Peltz to end his peacocking so that Disney can focus on its bright future, and not be dragged backward in time,” Jason Aintabi, Blackwells’ chief investment officer, said in a statement. “Disney’s current leadership is invaluable to its shareholders. ... This campaign provides shareholders a necessary alternative to what would otherwise be a solipsistic sideshow.”

Disney issued a statement saying its governance and nominating committee would “review the proposed Blackwells nominees and provide a recommendation to the Board as part of its governance process.”

The moves from ValueAct and Blackwells come as Peltz’s New York-based hedge fund, Trian Fund Management, has escalated its campaign to instate Peltz as a board member, an effort backed by former Marvel Entertainment CEO Ike Perlmutter. In December, Trian gained the support of former Disney chief financial officer Jay Rasulo, whom the investment firm said it would nominate for a board seat at the 2024 shareholder meeting.

Peltz began fighting for a board seat in 2022 when Disney was led by Chief Executive Bob Chapek, Iger’s handpicked successor. Trian acquired about $800 million in Disney shares, with Peltz lobbying for board representation. Iger returned to the top Disney post in November 2022 after the board fired Chapek. The company had recently reported nearly $1.5 billion in quarterly operating losses from its streaming businesses.

Peltz appeared to back off in early February after Iger rolled out major cost cuts at Disney that included the elimination of thousands of jobs. Months later, however, Peltz reignited the fight with the help of Perlmutter. Trian increased its stake in Disney to about $2.5 billion, or 30 million shares, at the time.

Disney has pushed forward by appointing Morgan Stanley CEO James Gorman and former Sky CEO Jeremy Darroch to the board, but the refreshed board representation has not been enough to placate Peltz, whose hedge fund has accused the Disney board of being “too closely connected to a long-tenured CEO and too disconnected from shareholders’ interests.”

Disney has not yet announced the date of its 2024 shareholder meeting, but the session is expected to take place this spring. During the meeting, shareholders will be able to vote on board nominations, which will now include names submitted by Trian and Blackwells.

In a statement following the announcements from ValueAct and Blackwells, Blackwells’ Aintabi said that Trian had “announced that it welcomes Blackwells’ engagement,” and described Disney’s agreement with ValueAct as a “defensive move” that “does not solve for anything.”

“We are gratified that Trian sees the merit in Blackwells nominees given they are independent, have the relevant experience and present themselves without an agenda,” Aintabi said. “Bringing all shareholders a real and better choice for directors is the necessary act that will support the future success of Disney.”

Representatives for Disney did not immediately respond to a request for comment beyond its Wednesday statements.