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Walt Disney has won the support of investor ValueAct Capital, as the entertainment company gears up for a fight with activist Nelson Peltz over how to boost profits and lift its share price.
San Francisco-based ValueAct, an activist known for taking a more collaborative approach to its targets, built a stake in Disney last year as the entertainment company wrestled with its lossmaking streaming business.
Disney said on Wednesday that it had entered into an “information-sharing” agreement with ValueAct and would consult with the investment firm on “strategic matters”. ValueAct would support the Disney board’s nominees for election at this year’s annual meeting, it added.
The shareholder meeting, which typically takes place in March or early April, is set to be a bruising one after Peltz’s Trian Partners said it planned to nominate two candidates to Disney’s board.
Trian controls a roughly $3bn stake in Disney and has been at odds with the group for the past year, accusing the board of being too close to chief executive Bob Iger, who returned to run the company in late 2022.
Disney has been under pressure from investors to curb profligate spending during the streaming boom, as Wall Street has shifted its focus to profitability.
“ValueAct Capital has a record of collaboration and co-operation with the companies it invests in, and its co-CEO Mason Morfit has been very constructive in the conversations we’ve had over the past year,” Iger said on Wednesday.
ValueAct’s less fearsome approach has helped it win favour with previous targets. Salesforce, which a year ago faced an onslaught of activist investors, including Elliott Management, gave Morfit a board seat.
Morfit described Disney as “the world’s leading entertainment company”, adding that it had “the best intellectual property, sports brand and parks and experiences assets in the industry”. ValueAct has not disclosed the size of its stake.
The news of Disney’s agreement with ValueAct came as smaller New York-based activist Blackwells Capital, which has a $5mn stake in Disney, said it would put forward its own slate of nominees at the shareholder meeting.
The firm, which had previously taken aim at fitness company Peloton, said it planned to nominate Warner Brothers Discovery executive Jessica Schell, Tribeca Film Festival co-founder Craig Hatkoff, and Leah Solivan, a venture capitalist who founded TaskRabbit.
In December, Trian said it intended to put forward Peltz and former Disney executive Jay Rasulo as directors. The move marked Peltz’s second effort to force change at Disney after aborting an earlier attempt to allow Iger to implement changes at the group.
Trian’s decision followed Disney’s nomination in November of outgoing Morgan Stanley chair and chief executive James Gorman and Sir Jeremy Darroch, former group CEO of Sky, as board directors.
