Activists Support Disney in Boardroom Battle Against Peltz

On January 3, activist hedge funds ValueAct Capital and Blackwells Capital expressed their support for Walt Disney Co (DIS.N) as the company faces a board challenge from activist investor Trian Fund Management. This development adds a unique twist to the ongoing battle for Disney’s board, highlighting the significant stakes involved in the company’s turnaround efforts led by CEO Bob Iger.

In response to the challenge, Disney announced a deal with ValueAct, with the hedge fund advising on strategy and backing the company’s director nominees at the upcoming annual shareholder meeting. Separately, Blackwells revealed the nomination of three directors to Disney’s board, all of whom support the company’s existing strategy.

Trian Fund Management, led by CEO Nelson Peltz, had previously nominated himself and former Disney CFO James Rasulo to Disney’s board, advocating for cost-cutting measures, a CEO succession plan, and a revamp of the streaming operations. Disney responded by refreshing its board in November, appointing new directors.

ValueAct, known for collaborative approaches with the companies it invests in, sees potential for Disney’s stock to double. Blackwells, on the other hand, considers Disney’s agreement with ValueAct a defensive move and asserts the need for its own nominees.

The ongoing boardroom battle underscores the challenges faced by Disney, particularly in light of a $1.5 billion quarterly loss in its streaming division and the underperformance of movie franchises. Despite Disney’s confirmation of Blackwells’ nominations, the governance and nominating committee will review the candidates.

As the situation unfolds, investors closely watch the dynamics within Disney’s board and the potential impact on the company’s strategic direction and future success.

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