»Nelson Peltz, an investor, challenges Bob Iger’s kingdom for a Disney board seat«
Nelson Peltz, an activist investor, started a campaign for a board seat at Walt Disney on Thursday to rescue the entertainment giant from what he termed a “crisis” of overspending on the streaming business, the acquisition of 21st Century Fox, and failed succession planning.
The billionaire’s action poses a significant threat to Disney CEO Bob Iger, who recently returned from retirement to oversee the corporation for a second time.
The fight would pit Peltz, recognized for his work with consumer companies, against Iger, one of Hollywood’s most popular executives.
Some experts attributed the increase to Peltz’s earlier effectiveness in bringing about organizational transformation. The share price has dropped 39% during the past year.
The conflict with Disney could be Peltz’s largest proxy war since his bitter campaign to gain a seat on P&G’s board of directors. During his tenure of more than three years on P&G’s board, the company’s stock price increased by about 80%.
Analysts feel that CEO Bob Iger, whom Peltz has stated he has no intention of replacing, could pose a significant obstacle to the activist’s strategy.
After Disney denied Peltz a board seat, Trian Fund Management filed filings with the US securities commission on Thursday for his election as a director.
Rosenblatt Securities stated, “Investors would appreciate additional assurance that past problems will not reoccur.” “Peltz, who has a history of effecting change at companies such as P&G, (Kraft) Heinz, and Wendy’s, could provide a measure of this.”
Peltz, whose fund owns a 0.5%, or approximately $900 million, stake in Disney, stated on Thursday that the media conglomerate should purchase the remaining Hulu shares from Comcast or abandon the streaming business.
In an interview with CNBC, he stated that Disney needed to increase its capital expenditures in its parks division, where it likely raised ticket prices “too aggressively.” He stated that it is “more than a media company and is a consumer company.”
Iger has turned back certain price increases enacted by former CEO Bob Chapek at the parks business and begun his second tenure with a commitment to cost reduction and profitability.
Analysts believe the executive, whom Peltz has stated he does not intend to replace, might provide a significant obstacle to the activist’s agenda.
“Iger is a popular CEO, not only within Disney and among its employees, but also in Hollywood and on the financial market. This effort may be difficult for Peltz to get traction, according to Ben Barringer, an equity research analyst at Quilter Cheviot.
Disney acquired Pixar Animation Studios, Marvel Entertainment, and 21st Century Fox during Iger’s first term as CEO, and its market valuation increased fivefold.
His second campaign is anticipated to center on the Disney+ streaming service he helped develop in 2019. The unit lost about $1.5 billion in the most recent reported quarter, which is more than double the deficit from the prior year. Disney predicts that the corporation will turn a profit in fiscal year 2024.
Third Point’s Daniel Loeb has also put pressure on the firm to split off cable sports channel ESPN, revamp its board, and acquire Comcast’s 46 million-subscriber holding in Hulu.
If not resolved earlier, investors will vote later this year on whether Peltz should be on the company’s board. The annual shareholder meeting was place on March 9 last year.
»Nelson Peltz, an investor, challenges Bob Iger’s kingdom for a Disney board seat«