»Peltz-Iger! Billionaire investor buys cheap Disney shares for board seat«
Nelson Peltz, a billionaire businessman whose daughter Nicola married Brooklyn Beckham in a lavish ceremony last year, is vying for a seat on the Walt Disney Company board, setting the stage for a spectacular battle with new CEO Bob Iger.
Through his business Trian, Peltz, 80, holds 9.4 million Disney shares worth at over $900 million, representing a roughly 0.5% interest.
Under the turbulent leadership of recently-removed CEO Bob Chapek, Disney’s stock has fallen 39 percent in the previous 52 weeks and is trading at an eight-year low, allowing Peltz to take the opportunity.
Thursday, his business intends to file filings with the Securities and Exchange Commission nominating Peltz as a director candidate in an effort to curb what Peltz views as excessive spending and mismanagement at Disney.
Disney is determined to thwart him, however.
Nelson Peltz is shown beside his wife Claudia (left) and daughter Nicola, who is married to Brooklyn Beckham (right). The Florida-based billionaire is currently attempting to obtain a seat on Disney’s board of directors.
On December 12, Disney CEO Bob Iger is photographed at the premiere of the new Avatar film alongside Sam Worthington. Peltz claims he has no intention of removing Iger, but the board is rejecting his efforts to join the board.
Wednesday, Susan Arnold, the outgoing chair of the board, called Peltz and offered him a position as a board observer if he signed a “standstill agreement” assuring he would not raise his holding.
According to the Wall Street Journal, Peltz rejected.
Michael Ashley Schulman, chief investment officer of Running Point Capital Advisors, stated, ‘Whether or not Peltz wins his fight, his move appears to have prompted Disney’s management to be more aggressive in implementing reforms and refining their plan.’
He added, “I’m going to grab a box of popcorn before watching this show!”
Peltz’s company asserts that he has no desire to unseat Iger, who mounted a remarkable comeback in November after stepping down and handing over the keys to Bob Chapek the previous year.
Peltz, 80 years old, is the founding partner and CEO of Trian Fund Management. In June 2022, he is pictured (right) during an interview on an edition of Bloomberg Wealth with David Rubenstein.
The share price of Disney has dropped during the past year.
Chapek suffered in the shadow of his predecessor, the esteemed Iger, who was CEO and Chairman of The Walt Disney Company from 2005 to 2020 and Executive Chairman and Chairman of the Board until 2021.
Chapek was also attacked for his botched handling of the Florida ‘Don’t Say Gay’ statute, which culminated in a very public confrontation with Florida’s governor while Disney employees protested, and ultimately led to the company losing its preferential business conditions in the state.
Iger has vowed to turn around the corporation.
Yet Peltz’s firm believe not enough is being done.
Peltz criticized the corporation for bungling its succession planning, overspending on 21st Century Fox, and doling out ‘extraordinary’ reward packages to its CEO.
According to public documents, Iger’s base compensation for returning to his former position will be $1 million, but with bonuses it could reach $27 million.
Wednesday, Peltz’s business produced a presentation stating that Disney is a “company in crisis” whose shares have fallen 39 percent over the past 52 weeks and are currently trading at an eight-year low.
They are requesting that Disney decrease costs and produce a profit in its Disney+ streaming business, which has been losing money despite its expansion.
Bob Chapek was removed as CEO in November, with his predecessor Bob Iger returning to the position.
Trian wrote that many of Disney’s problems are “self-inflicted and must be addressed,” demanding accountability for capital spending and the return of the company’s dividend by fiscal 2025.
An expected boardroom struggle will match Peltz, a recognized activist known for his work with consumer companies, against Iger, who has been enormously popular in Hollywood for years.
This is only the fourth proxy battle in Trian’s history, and the investor often presents himself as a partner to management.
If the two parties cannot reach an agreement beforehand, investors will vote later this year on Peltz’s eligibility to serve on the Disney board.
Disney’s shareholders were asked to vote against Peltz.
They stated, “The Walt Disney Company remains open to constructive engagement and ideas that help drive shareholder value.”
While senior executives of The Walt Disney Company and its Board of Directors have met with Mr. Peltz multiple times over the past few months, the Board does not endorse the Trian Group candidacy and recommends that shareholders vote FOR all of the Company’s nominees.
After a year of terrible leadership under Bob Chapek, Iger, seen on December 6th, swore to turn Disney around.
The Board is nominating for re-election at the Company’s Annual Meeting incumbent directors Mary T. Barra; Safra A. Catz; Amy L. Chang; Francis A. deSouza; Carolyn Everson; Derica W. Rice; Michael B.G. Froman; Maria Elena Lagomasino; Calvin R. McDonald; Mark G. Parker – who will succeed Arnold as chair since he is stepping down; and Iger himself.
Iger has committed to prioritize cost reduction and profitability at the entertainment conglomerate with holdings spanning from theme parks and streaming to movie studios and television. Disney previously stated that it anticipates the streaming business to break even by 2024.
Iger, age 71, has decided to continue serving as CEO for two more years while the organization hunts for a permanent replacement.
Typically, a company’s stock price increases when an activist investor becomes engaged.
In extended trading on Wednesday, shares of Disney, which is valued at $176 billion, climbed 1.6%.
This is the second time in the past six months that an activist shareholder has requested changes at Disney. Daniel Loeb of Third Point urged the firm to spin off ESPN, repurchase shares, and restructure its board.
According to individuals involved with the discussions with Loeb, the billionaire investor listened attentively and was receptive to dialogue, and the two parties swiftly decided to add longtime media executive Carolyn Everson to the board.
»Peltz-Iger! Billionaire investor buys cheap Disney shares for board seat«