US Markets
Wednesday, November 8th, 2023 3:29 pm EDT
Key Points
- Activist Investor Interest: Nelson Peltz’s Trian Fund Management, which oversees around $2.5 billion worth of Disney shares, is closely monitoring Disney’s fiscal fourth-quarter earnings report. The majority of the shares controlled by Trian are associated with Ike Perlmutter, a former Marvel Entertainment executive and an ally of Peltz, who has previously clashed with Disney’s CEO Bob Iger.
- Proxy Fight Consideration: Trian Fund Management has refrained from making public statements since ending its last activist campaign against Disney in January. The fund is waiting for Disney’s earnings report to determine whether it will proceed with a potential proxy fight to nominate new board members. Peltz aims to join the board without going through a formal nomination process, which can be time-consuming and costly.
- Shareholder and Board Dynamics: Disney’s stock is currently at 10-year lows, and Peltz’s interest in Disney is driven by the absence of a controlling owner and a belief in Disney’s strong brand. Peltz may argue that Trian can bring accountability to a board that has allowed Bob Iger to remain as CEO for extended periods. Trian might need to propose specific financial strategies or ideas to sway Disney shareholders to vote for Peltz or other board members. Peltz may also be interested in Disney’s efforts to sell assets like ABC and form strategic partnerships for ESPN. If unsatisfied, Peltz may resort to a public battle to gain a board seat.
Nelson Peltz, an activist investor with significant control over Disney shares through Trian Fund Management, is closely monitoring Disney’s fiscal fourth-quarter earnings report. The majority of the shares under Trian’s influence belong to Ike Perlmutter, an ally of Peltz and former Marvel Entertainment boss, who has had previous clashes with Disney’s CEO Bob Iger. Trian is considering whether to launch a proxy fight to nominate new board members but is waiting for Disney’s earnings report to make a decision. Peltz aims to join the board without a lengthy nomination process. If a nomination slate is presented, it is likely to focus on Disney’s declining stock price, as Disney’s shares are near 10-year lows. Disney’s board has also faced challenges in finding a successor to Bob Iger, who has renewed his contract multiple times. Trian’s interest in Disney is due to its lack of a controlling owner and belief in its strong brand. To gain shareholder support, Trian may need to propose specific ideas or financial strategies not previously articulated by Disney’s management. Peltz might push for more information on Disney’s efforts to sell assets like ABC or form strategic partnerships, and if unsatisfied, a public board fight could be the next step.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/08/disney-dis-board-in-focus-ahead-of-q4-earnings.html
