Disney Gets Some Help from ValueAct in Board Battle

Hey there, hi there, ho there! You’re as welcome as can be – from embattled Disney CEO Bob Iger’s perspective, at least. 

Disney said Wednesday it won the support of investor ValueAct Capital amid a board fight with activist investor Trian Partners, which is led by Nelson Peltz, a staunch Iger opponent.

The King Has Returned

Disney has some issues — its streaming service isn’t profitable, people are cutting the cord on their cable packages, and its box office returns have been lackluster. Iger returned as CEO in 2022 after fall-guy Bob Chapek was ousted, but many stakeholders don’t see much progress with the company’s share price floating around 10-year lows.

Trian, which holds a $3 billion stake in Disney, wants a say in future strategy. In December, the hedge fund announced it would nominate Peltz and former Disney executive Jay Rasulo to the board. “The root cause of Disney’s underperformance, in our view, is a board that is too closely connected to a long-tenured [chief executive] and too disconnected from shareholders’ interests,” Trian said.

Thankfully for Iger’s sake, Disney has a new friend in another activist investor:

• Disney said Wednesday that San Francisco-based ValueAct will back the company’s board nominees at this year’s shareholders meeting in exchange for the board agreeing to consult as needed with the fund.
• While Trian prepares for war, ValueAct tends to take a calmer approach to its activist investor strategy, which has resulted in some healthy gains. Last year, Salesforce gave ValueAct CEO Mason Morfit a board seat.

EEEK! A Mouse: It’s maybe not Disney’s top problem, but it’s definitely not a good development that Mickey Mouse’s original “Steamboat Willie” incarnation just entered the public domain. So in addition to Disney’s already-lifeless theatrical releases, audiences should be prepared for an onslaught of ironic, B-grade horror movies and TikToks starring a homicidal mouse.