Credit: Inside the MagicDisney recently launched an unprecedentedly vicious and personal attack against Ike Perlmutter, who it claimed is the mastermind behind Trian Fund Management’s proxy battle for its board of directors, but the investment firm isn’t taking it lying down.
In fact, Trian Fund Management, the mega-wealthy funds management firm co-founded by billionaire activist Nelson Peltz, has gone nuclear and launched its own counter-attack against the Walt Disney Company. This is just the latest exchange between the two organizations in the lead-up to the imminent Disney shareholder vote on April 4, which will likely determine the course of the iconic media company for years to come.
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While most corporate battles go largely unnoticed by the public, the sheer vitriol between Disney and Trian Fund Management has been shocking. That was part of Disney’s recent campaign presentation against Nelson Peltz and former Disney CFO Jay Rasulo, titled “Correcting Trian’s Fiction With Facts.”
While the presentation (which can be found below) contested a number of claims by the firm, it also took specific aim at former Marvel Entertainment Chairman Ike Perlmutter, one of the single largest owners of Disney stock, and, according to the Mouse, the true power behind the Trian takeover attempt. But more than that, the presentation claims that the entire proxy battle is more about Perlmutter’s wounded ego after being laid off and his personal hostility toward Disney CEO Bob Iger than actual shareholder value.
Perlmutter not directly involved himself in the proxy battle beyond pledging his shares to Nelson Peltz and Jay Rasulo (characteristically for the media-averse billionaire), but Disney claims that “Trian neglected to address Perlmutter’s well-chronicled, difficult history with Bob Iger and many Disney employees, which is a highly relevant consideration for shareholders…[and] has said little about the role and influence of Perlmutter — it is not credible that Perlmutter is truly just sitting on the sidelines.”
Trian is now lashing out with its own press release, asserting that Disney is basically going on the warpath and trying to distract from the financial issues at hand. In a letter to shareholders, the firm says it “is disappointed that Disney is running a scorched-earth campaign that appears to be focused on deflecting attention from the Board’s failures.”
This is a continuation of Nelson Peltz’s general strategy in the Restore the Magic campaign so far, which is to claim that any positive statements or claims of financial improvement are a distraction, or as Trian memorably put it, “throwing spaghetti at the wall [is not] going to feed shareholders who have been starved of returns for so long.”
The new Trian letter continues, “In our view, this charged and disingenuous rhetoric seems calculated to distract shareholders from Disney’s poor track record and sidestep accountability. So too is Disney’s focus in this campaign on Bob Iger and Ike Perlmutter.” Notably, it does not deny the claim that the majority (79%, to be exact) of Trian’s Disney stock actually belongs to Perlmutter, unquestionably making him the main power behind their takeover.
Instead, it says, “This election contest is not about Mr. Iger or Mr. Perlmutter. We do not oppose Mr. Iger’s reelection nor his continued service as CEO. Mr. Perlmutter is not on the ballot, is not seeking a Board seat and will not influence the fiduciary responsibilities of our candidates…The relationship between Mr. Iger and Mr. Perlmutter is irrelevant. “
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Ultimately, Trian says, “Irrespective of the paid endorsers or harsh rhetoric it uses, Disney cannot convince us, or, we suspect, our fellow owners, that the Company is performing well.” Throughout the lengthy letter, it reiterates that only Nelson Peltz and Jay Rasulo can improve the value of Disney stock and, thus, shareholder dividends. Despite Trian’s claims of “harsh rhetoric” on its opponent’s side, the firm itself has not been afraid to make angry claims against Disney in pursuit of board seats.
We’ll just have to wait and see how Disney escalates things with its next presentation.
The full text of “Correcting Trian’s Fiction With Facts” can be read here:
Inside the Magic reached out to Trian for comment, but has not heard back by the time of publishing.
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