Disney clashes with Nelson Peltz as activist launches new proxy battle

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Nelson Peltz has launched a second proxy battle at Walt Disney after the entertainment group rejected his push to join the board, setting off another bitter fight between the activist investor and chief executive Bob Iger. 

Peltz’s Trian Partners fund, which controls a roughly $3bn stake in Disney, said in a statement on Thursday that it intended to take its “case for change directly to shareholders,” after Iger again turned down Trian’s request for board representation. 

“Since we gave Disney the opportunity to prove it could ‘right the ship’ last February, up to our re-engagement weeks ago, shareholders lost [about] $70bn of value,” Trian wrote. 

Peltz’s firm called off an earlier proxy fight with Disney in February after Iger unveiled a plan to revive the company by cutting costs and taking other measures to make its streaming business profitable.

However, people familiar with Peltz’s thinking said his main issues were with Disney’s share price and its margins as well as the board’s decision in July to extend Iger tenure’s as chief by two years to the end of 2026. 

Disney shares are up about 4 per cent this year, underperforming the near 19 per cent rally in the broader stock market.

“Investor confidence is low, key strategic questions loom, and even Disney’s CEO is acknowledging that the company’s challenges are greater than previously believed,” Trian wrote in its statement. 

In response, Disney said on Thursday it “has a proven track record of delivering long-term value to our shareholders and is in the midst of a significant transformation”.

The company added that Peltz was working in partnership with Isaac Perlmutter, a former Disney executive who owns 78 per cent of the shares that Trian “claims to have beneficial ownership of”. According to Disney, Perlmutter, who was fired earlier this year, “has voiced his longstanding personal agenda against Disney’s CEO”.

Disney on Wednesday sought to get ahead of a Peltz incursion by nominating two new directors to its board: outgoing Morgan Stanley chief executive James Gorman and former Sky boss Jeremy Darroch. People close to Trian have in the past argued that the board needed to be “more focused, aligned and accountable”.

Trian said the addition of Gorman and Darroch to the board was “an improvement from the status quo” but added that it would not “restore investor confidence or address the root cause behind the significant value destruction and mis-steps that this board has overseen”.

The battle comes as Disney faces scrutiny from both investors and corporate governance experts over its succession planning. Gorman was set to join a “succession planning committee” on the board, Disney said on Wednesday. 

Iger — who last year returned to Disney after the ousting of his handpicked successor, Bob Chapek — this week told a conference that the process to find his replacement was “robust right now”. The 72-year-old said he would “definitely” step down at the end of his contract in 2026.

Last year Iger announced plans to slash $5.5bn from Disney’s costs as the entertainment industry navigated a difficult transition to streaming. Iger this month said he would cut an additional $2bn, and announced plans that Disney was set to reintroduce a small dividend by the end of this year.