Nelson Peltz’s Trian to seek at least three Disney board seats, sources say

By Svea Herbst-Bayliss, Dawn Chmielewski and Samrhitha A

(Reuters) -Activist investor Nelson Peltz is pushing ahead with plans to seek at least three board seats at Disney as the firm is not satisfied with Disney CEO Bob Iger’s changes, several people familiar with the matter said.

During a conversation on Thursday morning with Iger, Disney extended an offer for Trian to meet with the company’s board but rejected the activist shareholder’s request for seats on a board that will soon have 12 members, Trian said in a statement.

Trian, which ranks among the industry’s oldest and most respected corporate agitators, has kept a close eye on the entertainment and media giant ever since Iger returned from retirement a year ago to run Disney again.

Early this year, Peltz criticized Disney’s capital spending, its money-losing streaming business and a bungled succession plan, and sought a voice on the board. He aborted a board challenge to give Iger time to “right the ship,” after Iger outlined his turnaround plans. Now it looks as if time is up.

Trian, which owns roughly $3 billion worth of Disney stock, said it “intends to take (its) case for change directly to shareholders,” signaling it will proceed to a second proxy fight and nominate director candidates when the window for nominations opens early next month.

“Investor confidence is low, key strategic questions loom, and even Disney’s CEO is acknowledging that the company’s challenges are greater than previously believed,” Trian said in the statement.

Shares in Disney, which has a market capitalization of $169 billion, are down 16% since Feb 9, when Peltz withdrew from his campaign to gain a board seat.

Investor enthusiasm lifted Disney stock 20% in the two-and-a-half months after Iger’s return in November 2022 but lost most of the gains this year, closing on Thursday at $92.69 per share, less than a dollar higher than the price before Iger was brought back.


Over the past 12 months, Disney has restructured the company and significantly reduced costs. It told investors earlier this month it is on track to achieve about $7.5 billion in cost savings – $2 billion more than its original target.

Disney said it will work to make its streaming business profitable, build ESPN into the “pre-eminent” digital sports brand, improve the performance of its film studios and “turbocharge” growth at its theme parks, through $60 billion in investment over the next decade.

Disney noted Peltz is allied with Isaac Perlmutter, a former Disney executive who was terminated earlier this year and has a “longstanding personal agenda” against Iger.

The company said Perlmutter’s agenda “may be different than that of all other shareholders.”

Despite Iger’s efforts and Thursday morning’s phone call, positions appear to have hardened this week.

Disney named soon-to-be-retiring Morgan Stanley chief James Gorman and veteran media executive and former group chief executive of Sky, Jeremy Darroch, to its board, a pre-emptive step companies targeted by activists often take.

The men will join early next year and former Illumina chief, Francis deSouza, will leave.


Another investor, Blackwells Capital, issued a statement of support for Iger and his restructuring of the company, as well as for the two new board members, Gorman and Darroch.

Blackwells said displacing these individuals with Peltz and other Trian nominees would deprive shareholders of “valuable, experienced voices in the boardroom at a critical time in the company’s history.”

Trian said while the two new Disney directors did represent an improvement from the status quo, they “would not restore investor confidence or address the root cause behind the significant value destruction”.

The Disney board on Thursday announced a cash dividend of 30 cents per share, payable on Jan. 10.

Disney said it will recommend shareholders support its slate of nominees. Investors and industry analysts are already calling the presumed battle Disney 2.0, but they note it might be tougher this time for Peltz to win over other shareholders.

Patrick Gadson, co-head of the shareholder activism practice at law firm Vinson & Elkins which is not involved, said proxy advisers will assess how much change Disney has accomplished.

“If they’ve made significant progress,” Gadson said of Disney, proxy advisers “are more likely to allow for time to complete the transformation.”

(Reporting by Samrhitha Arunasalam in Bengaluru and Dawn Chmielewski in New York and Svea Herbst-Bayliss in Providence; Editing by Mark Porter, Lisa Shumaker and Lincoln Feast.)