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Credit: Inside the MagicA new report indicates that activist billionaire Nelson Peltz lost huge amounts of money because of the Walt Disney Company board of directors and Bob Iger‘s radical plans, a new report claims.
Nelson Peltz and his Trian Fund Management are one of the largest Disney stockholders and are currently battling out the current board (and Bob Iger) for control of the company in a proxy battle. While the Disney board is coming out hard against Peltz and his nominees, the billionaire businessman also has the backing of former Marvel Entertainment chairman Ike Perlmutter, who has his own bone to pick with the company’s current management.
According to a new report from Reuters, Nelson Peltz made a $3 billion bet on Disney that ended up losing Trian Fund Management approximately half of what it was projected to return for its investors. This was largely due to Trian disproportionally positioning itself in Disney stock; per an anonymous Trian investor, at one point, 40% of Trian’s portfolio was based on underperforming Disney shares.
Related: Billionaire Businessman Seeks to ‘Restore the Magic’ at Disney
While the report does not have specific numbers, it can be safely assumed that Trian’s Disney-based underperformance lost investors millions of dollars. Nelson Peltz’s company currently has a portfolio estimated at about $6.5 billion, meaning slashing an expected investor return of 20% (similar to its peers in its field) to 10% is a vast amount of money.
Unsurprisingly, this seems to have made the battle between Nelson Peltz and the Walt Disney Company a bit more vicious. Trian Partners has launched even launched a website, Restore the Magic, that directly attacks CEO Bob Iger and claims that only its own board nominees, board nominees Nelson Peltz and Jay Rasulo, have investors’ benefit in mind.
The website (in addition to hosting numerous infographics), claims:
“Trian believes Disney is the world’s greatest entertainment company, BUT it hasn’t performed for shareholders
We want this beloved company to live up to its potential for shareholders and generations of Disney fans.Trian beneficially owns a ~$3B stake and believes the board needs new, truly independent directors.
Trian’s board nominees, Nelson Peltz and Jay Rasulo, want to #RestoreTheMagic.”
Related: Disney Sends ‘Power Move’ Message to Billionaire Investor
In rebuttal, an official press release from the Walt Disney Company states:
“The Board does not endorse the nominations of Nelson Peltz and James Rasulo put forth by Trian Fund Management, L.P. and its affiliates, led by Nelson Peltz and supported by former Disney executive Isaac Perlmutter (collectively, the “Trian Group”). The Board recommends that shareholders do not vote for the Trian Group nominees, and that they reject a related proposal from the Trian Group to amend the Company Bylaws.”
There’s an immense amount of money at stake in this new Disney proxy battle, but it turns out that things might be a bit more personal than at first thought.
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