A multimillion-dollar quagmire battle over Walt Disney’s future continues Wednesday when the company is expected to announce that shareholders have rejected two hedge fund bids to shake up the entertainment giant’s board of directors. It will officially come to an end.
Disney secured enough shareholder votes on Tuesday to defeat a challenge from billionaire investor Nelson Peltz and Blackwells Capital, sources told Reuters. Officials warned that some shareholders may change their votes.
If Disney wins, it would be a victory for CEO Bob Iger, who is steering the Mouse House through the industry’s transition to streaming.
Vanguard Group, the company’s largest shareholder, and other investors voted in favor of Mr. Iger and 11 other current board members, according to people familiar with the vote.
A Disney spokesperson did not respond to a request for comment. Mr. Tryon and Mr. Blackwells did not comment.
Official results will be disclosed at Disney’s annual shareholder meeting, which is scheduled to be streamed live Wednesday at 1:00 p.m. ET.
Mr. Peltz, CEO of Trian Fund Management, and Mr. Blackwells are seeking to win the five seats between them on Disney’s 12-member board of directors. Activists argued that the $225 billion media company had failed to plan its CEO succession, lost its creative spark and failed to properly leverage new technology.
The battle has been closely watched as a referendum on Disney’s efforts to reinvigorate its film and TV franchises, make its streaming business profitable and find a partner to help build a digital future for its sports network ESPN. It’s here.
Both sides spent millions of dollars on campaigns to persuade voters and launched public and private attacks.
Mr. Peltz had been seeking board seats for himself and former Disney chief financial officer Jay Laslo. Disney said the pair lacked the necessary skills and there was “nothing new” in their suggestions for improvements, noting that Laszlo had been handed over to replace Iger.
At one point, Peltz retorted that Disney was “stupid” to oppose him and claimed he was trying to help Iger.
In the final hours before voting closed, billionaire investor Bill Ackman, himself a veteran of proxy fights, wrote in a post on X that Peltz was a “great addition” to the Disney board. “I’ll give it to you,” he said.
Tryon was Disney’s fifth largest shareholder with a 1.76% stake as of Dec. 31, according to LSEG data. The hedge fund’s $3 billion bet on Disney was largely responsible for its poor performance last year compared to its activist peers, according to financial details provided to Reuters by Trian investors.
Disney stock peaked at $201.91 in March 2021, when the company was gaining streaming subscribers. The stock subsequently fell as the streaming division continued to post losses. Disney’s board of directors fired then-CEO Bob Chapek, and Iger returned to management.
The stock has rebounded 35% this year, closing at $122.82 on Tuesday. That was helped by strong revenue and initiatives such as a $1.5 billion investment in Fortnite maker Epic Games and a sports streaming app with Fox and Warner Bros. Discovery. It is still down 39% from its all-time high.
Mr. Iger, 72, won a series of public endorsements rarely seen in proxy contests. These include Star Wars creator George Lucas, members of the Disney family, JPMorgan Chase CEO Jamie Dimon, and Emerson Collective founder Laurene Powell Jobs. It was.
Disney is also backed by proxy advisory firm Glass Lewis. Another advisory firm, Institutional Shareholder Services, recommended Mr. Peltz, and pension fund giant California Public Employees’ Retirement System (Calpers) backed Mr. Peltz and Mr. Laszlo.
