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Image Credit: Inside The MagicDisney has officially gone on the offense following a recent update to its website dedicated to getting the shareholders on Board and ensuring that the House of Mouse retains control of its Board as billionaires attempt to step in.
Disney Board Warefare – House of Mouse Fighting Back Hard With New Information That Could Lead Its Shareholders Into the Promise Land
Walt Disney (DIS.N) has directly addressed its ongoing battle with activist investor Nelson Peltz, presenting a detailed rebuttal of Peltz’s claims on Tuesday’s Vote Disney website. The Walt Disney Company is fighting back hard to remain in control of its Board of Directors.
In its response, Disney refuted nine specific assertions made by Peltz, who is seeking to secure two board seats – one for himself and another for his ally and former Disney Chief Financial Officer, Jay Rasulo. With approximately one month remaining, Disney, Peltz, and fellow activist investor Blackwells Capital are intensifying efforts to sway shareholders in their favor, spanning from institutional investors to individual shareholders.
The company meticulously challenged many of Peltz’s arguments, ranging from his investment track record to the financial expertise of Rasulo, his ally. Disney pointed out that among the 11 companies where Peltz or other Trian representatives held board seats, which Peltz touted as benefiting from his involvement, approximately 68% underperformed the Standard & Poor’s 500 index.
Contrary to Trian’s assertion in February that it was “caught in the Disney mousetrap,” Disney highlighted a report revealing Peltz’s substantial profit of $150 million from the sale of about one-third of his stake in the company in early 2023. Additionally, Disney disputed Trian’s claim regarding the potential benefit of Rasulo’s media and business expertise, noting a significant decline of 87% in iHeartMedia’s stock since Rasulo joined the company’s Board as lead independent director in May 2019.
Addressing concerns about its global streaming services, Disney defended their performance and rejected claims of refusal to engage with Peltz, asserting that there have been no fewer than 20 “meaningful interactions” between the parties.
This clash with activist investors comes at a crucial juncture for Disney as the company endeavors to revitalize its creative franchises, achieve profitability in its streaming business, and forge partnerships to enhance ESPN’s digital prospects. Chief Executive Bob Iger has characterized the activist campaigns as a “distraction.”
Meanwhile, hedge fund Blackwells Capital has also launched efforts to garner investor support for its three nominees to Walt Disney’s Board: Craig Hatkoff, co-founder of the Tribeca Film Festival with a background in real estate; Jessica Schell, former executive vice president of Warner Bros Home Entertainment; and Leah Solivan, founder and former CEO of TaskRabbit, an online freelance labor marketplace.
Blackwells Capitol also mentioned the desire to split the Disney Company into three separate parts, stating that things have gotten “too complex for any one successor to Mr. Iger.”
Nelson Peltz also launched his fight in this Board of Directors battle with the announcement of his website under the banner of “Restore the Magic,”