Peltz against Iger! Billionaire investor buys Disney stock at cut price in bid to secure board seat
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Billionaire investor Nelson Peltz, whose daughter Nicola married Brooklyn Beckham last year in a lavish ceremony, is fighting to secure a seat on the Walt Disney Company’s board of directors, setting the stage for a spectacular showdown with new CEO Bob Iger. .
Peltz, 80, owns through his company Trian 9.4 million shares of Disney, valued at about $900 million, a stake of about 0.5%.
Shares of struggling Disney have fallen 39 percent in the past 52 weeks, under the tumultuous leadership of recently ousted CEO Bob Chapek, and are trading at an eight-year low, allowing Peltz to seize the moment.
His firm plans to file documents with the Securities and Exchange Commission on Thursday publicly nominating Peltz as a director nominee, in an effort to rein in what Peltz views as excessive spending and mismanagement at Disney.
Disney, however, is determined to thwart him.
Nelson Peltz is pictured with his wife Claudia (left) and daughter Nicola (right), who is married to Brooklyn Beckham. The Florida-based businessman is now trying to secure a seat on the Disney board.
Bob Iger, the CEO of Disney, appears at the premiere of the new movie Avatar on December 12, with Sam Worthington. Peltz insists that he does not intend to oust Iger, but the board resists Peltz’s efforts to join the board.
Outgoing board chair Susan Arnold called Peltz on Wednesday and offered him the olive branch of a role as a board observer, provided he agreed to sign a “stay agreement,” guaranteeing he would not increase his stake.
Peltz refused, the Wall Street Journal informed.
“Whether or not Peltz wins his battle, his move appears to have made Disney management more aggressive in implementing improvements and adjusting its strategy,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors. .
He added: “I’m grabbing a box of popcorn to watch this show!”
Peltz’s firm insists it doesn’t want to oust Iger, who made a remarkable comeback in November after stepping down the year before and handing over the reins to Bob Chapek.
Peltz, 80, is a founding partner and CEO of Trian Fund Management. He is seen (right) during an interview on an episode of Bloomberg Wealth with David Rubenstein in June 2022.
Disney’s stock price has plummeted over the past year.
Chapek fought in the shadow of his predecessor: The highly respected Iger previously served as CEO and Chairman of The Walt Disney Company from 2005 to 2020, then CEO and Chairman of the Board until 2021.
Chapek also failed to win over staff and was criticized for his clumsy handling of Florida’s ‘Don’t Say Gay’ bill, which resulted in a very public spat with the Florida governor as Disney employees protested, with Disney ultimately losing your favorable trade terms. in the state.
Iger has promised to change the company.
However, Peltz’s firm believes that not enough is being done.
Peltz attacked the company for botching its succession planning, spending too much on 21st Century Fox and handing out ‘overblown’ compensation packages to its CEO.
Iger will earn a base salary of $1 million for returning to his old job, according to public records, but with bonuses included, that could increase to $27 million.
On Wednesday, Peltz’s firm made a filing calling Disney “a company in crisis” whose shares have fallen 39 percent in the past 52 weeks and are trading at their lowest level in eight years.
They are asking the company to cut costs and turn a profit on its Disney+ streaming business, which has been losing money even as it expands.
Bob Chapek (pictured) was ousted as CEO in November, and his predecessor Bob Iger returned
Many of Disney’s problems are “self-inflicted and need to be addressed,” Trian wrote, demanding accountability for how capital is spent and the reinstatement of its dividend for fiscal 2025.
A boardroom battle is expected to pit Peltz, an activist especially respected for his work in consumer companies, against Iger, who has been wildly popular in Hollywood for years.
The investor typically presents himself as a management partner and this marks only the fourth power struggle in Trian’s history.
If the two sides don’t reach an agreement beforehand, investors will vote later this year on whether Peltz should serve on Disney’s board.
Disney urged its shareholders to vote against Peltz.
“The Walt Disney Company remains open to constructive engagement and ideas that help drive shareholder value,” they said in a statement.
“While senior management of The Walt Disney Company and its board of directors have engaged with Mr. Peltz on numerous occasions over the past few months, the board does not endorse the Trian Group nominee and recommends that shareholders not support their nominee. and instead vote FOR all Company nominees.’
Iger, seen Dec. 6, has vowed to turn Disney around after a year of disastrous leadership under Bob Chapek.
The Board is nominating for re-election at the Company’s Annual Meeting the incumbent directors Mary T. Barra; Safra A. Catz; Amy L. Chang; Francis A. de Souza; Carolyn Everson; Derica W. Rice; Michael BG Froman; Maria Elena Lagomasino; Calvin R. McDonald; Mark G. Parker, who will assume the presidency, since Arnold retires, and Iger himself.
Iger has vowed to focus on cost reduction and profitability at the entertainment giant with interests ranging from broadcasting and theme parks to movie and television studios. Disney had said it expected the streaming business to break even by 2024.
Iger, 71, has agreed to serve as CEO for two more years while the company searches for a permanent boss.
Often, a company’s stock rises on the news that an activist investor is getting involved.
In Disney, which is valued at $176 billion, shares rose 1.6% in extended trading on Wednesday.
For Disney, this is the second time in six months that an activist shareholder has called for changes. Third Point’s Daniel Loeb prompted the company to spin off cable sports channel ESPN, buy back shares and update its board.
People familiar with the talks with Loeb said the billionaire investor listened carefully and was open to the conversation and the two sides quickly agreed to add former media executive Carolyn Everson to the board.