Disney Shares Slide After Iger Defeats Peltz's Trian In Proxy Fight

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by Tyler Durden
Wednesday, Apr 03, 2024 - 05:30 PM

Update (1325ET): Confirming the earlier leaks, Disney shareholders handed CEO Bob Iger a vote of confidence, rejecting dissident investor Nelson Peltz’s bid for a board seat at the giant entertainment company.

Shareholders elected all of Disney’s choices for the board, turning aside the nomination of Peltz, executives announced Wednesday at the company’s annual meeting. Investors also rejected Peltz’s ally, former Disney finance chief Jay Rasulo, and a slate from Blackwells Capital LLC, another dissident group.

Trian issued the following statement on today's results:

"While we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders. We are proud of the impact we have had in refocusing this Company on value creation and good governance. Since we re-engaged with the Company in late 2023, Disney has announced a host of new operating initiatives and capital improvement plans. The Board has been refreshed with two new directors.

Over the last six months, Disney's stock is up approximately 50% and is the Dow Jones Industrial Average's best performer year-to-date. We thank Trian's investors for the confidence they have placed in our efforts. And, we wish the best for all of the Company's stakeholders, including Disney's Board and management team. We will be watching the Company's performance and be focusing on its continued success."

Disney shares are selling off on the news...

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Walt Disney Co. and Chief Executive Officer Bob Iger are set to defeat Nelson Peltz's Trian Fund Management in a multi-month proxy battle, Bloomberg reports, citing people with knowledge of the matter. 

Enough votes had been cast as of Tuesday evening, including ones from Vanguard Group, BlackRock Inc., T. Rowe Price, Norges Bank Investment Management, ValueAct Capital Management, and retail investors to prevent Trian's Peltz and former Disney chief financial officer Jay Rasulo from joining the company's board. 

Trian had pushed for changes to management and strategy at the DEI-driven entertainment company to improve years of terrible performance. Just last year, the company suffered a series of movie flops, as one South Park episode explained very accurately that the woke mind virus is destroying the company's media content.  

Peltz has said, "Disney is stupid because I'm not trying to fire [chief executive] Bob Iger; I want to help him." He added, "We don't fire CEOs."

Nelson PeltzPhotographer: Calla Kessler/Bloomberg

The shareholder vote, slated for Wednesday, is the latest test for Iger, who returned to the helm in November 2022 to save the sinking ship.

Peltz has gained support from a group of current and former directors of major corporations, including Mondelez International Inc., Procter & Gamble Co., and Janus Henderson Group Plc. On Wednesday, the activist even won the support of Elon Musk. 

"Nelson Peltz should definitely be on the Disney board! He would help reform the company, improve the quality of product and generally serve in the best interests of shareholders, as he has done at many other companies. This would significantly improve Disney's share price." 

Musk continued, "While I don't own any Disney shares today, I would definitely buy their shares if Nelson were elected to the board. His track record is excellent." 

Disney shares have imploded since peaking above $200 in early 2021, recently bottoming around $80. 

In recent months, shares jumped more than 50% to $122 amid the proxy battle.