Nelson Peltz speaking on the 2019 Delivering Alpha conference in Recent York on Sept. 19, 2019.
Adam Jeffery | CNBC
A proxy battle between Nelson Peltz and Disney is brewing for the second time this yr.
Peltz’s activist firm, Trian Fund Management, has increased its stake in Disney to about 30 million shares, valued at roughly $2.5 billion, in response to people conversant in the matter. The stake makes Trian certainly one of the biggest shareholders in Disney.
The move comes lower than a yr after Peltz dropped his initial proxy fight with Disney, and days after the corporate’s stock reached a 52-week-low.
The firm plans to push for multiple seats on the board this time, including one for Peltz, the people said. Earlier this yr, the firm sought only a spot for Peltz.
The nomination window for brand new board members opens on Dec. 5 and runs until Jan. 4, in response to public filings. If Disney rejects Trian’s proposal, the firm could nominate directors throughout the open window to be voted on at the corporate’s annual meeting in spring 2024.
A Disney representative didn’t immediately reply to a request for comment.
Disney’s stock hit a 52-week-low on Oct. 4.
It has been nearly a yr since Bob Iger returned as Disney’s CEO. The corporate has struggled to make its streaming unit profitable and has announced other initiatives to show around its business.
Iger has opened the door to selling a few of Disney’s assets, particularly its TV networks business. He has also considered on the lookout for an investor in sports channel ESPN.
“After coming back, I noticed the corporate is facing quite a lot of challenges, a few of them self-inflicted,” Iger told CNBC’s David Faber in July.
Iger managed to ward off Peltz in February after the corporate unveiled an enormous restructuring plan that included cost cuts and seven,000 layoffs. Disney said it will slash $5.5 billion in costs, consisting of $3 billion from content, excluding sports, and one other $2.5 billion from non-content costs.
When Trian launched its proxy fight in January, the firm had owned about 9.4 million shares valued at roughly $900 million. Peltz had criticized Disney’s $71 billion acquisition of Fox in 2019, its failed succession planning and what he called “weak corporate governance” through the years that has depleted shareholder value.
It’s unclear if Trian has any specific operational ideas for Disney that Iger hasn’t already proposed or has privately rejected. Trian released a slide presentation in January showcasing Disney’s stock underperformance and the activist fund’s own track record of improving corporate valuation.
The fund spent several slides noting how Disney’s acquisition of nearly all of twenty first Century Fox’s assets has did not generate a return for shareholders.
Trian also focused on Disney’s inability to seek out a successor for Iger. The Disney board and Iger have been vetting succession candidates since Iger returned to the CEO job in November, in response to people conversant in the matter, and have targeted early 2025 as a logical time to establish that transition.
In July, Disney prolonged Iger’s contract by one other two years to 2026. The succession process has remained a key issue for the corporate and its leader. Iger returned to Disney following a fallout with Bob Chapek, has handpicked successor.