Nelson Peltz, through his Trian Fund Management, has secured a $2.5 billion position in Walt Disney Co., subsequently intensifying efforts to gain board representation amid concerns over the company’s stock performance, as revealed by the Wall Street Journal on Sunday. Walt Disney shares have experienced a decline of approximately 16% year-to-date.
Earlier this year, Peltz openly criticized Disney’s executive leadership and the declining value of its shares. He initiated a campaign in January to join the company’s board, expressing dissatisfaction with Disney’s operational strategy, excessive executive compensation, inadequate cost controls for emerging streaming ventures, a bungled succession plan, and the perceived overvaluation of the acquisition of 21st Century Fox in 2019.
Following a period of negotiation, a truce was reached on February 9 between Trian and Disney. This agreement was reached during a transitional phase for Disney, with Bob Iger reclaiming the CEO position in November 2022 after Bob Chapek’s tumultuous three-year term. In response to Peltz’s board representation bid and calls for operational changes, Disney introduced a comprehensive operational restructuring plan, to which Peltz responded by withdrawing his board seat proposal.
Recent months have seen Peltz quietly increasing his stake in the entertainment conglomerate. Disney, alongside other industry titans, is grappling with the disruptive shift from traditional broadcasting to streaming platforms, significantly impacting revenue generation from content production. Additionally, the media giant has faced challenges, including strikes initiated by the Writers Guild of America and SAG-AFTRA.
In July, Iger hinted at the potential sale of ABC and other traditional broadcasting assets, acknowledging the company is exploring partnership opportunities for ESPN.
As of Friday’s close, Disney shares were valued at $82.94, marking a near 3% increase, though still lower than the January figures, which ranged between $110 and $113.
Neither Disney nor Trian Fund Management representatives were available for immediate comment on Sunday. Source