Nelson Peltz Scores Major Ally in Disney Fight

Nelson Peltz is practically a mouseketeer now. 

On Thursday, the activist investor earned a huge win in his protracted battle of wills with Disney CEO Bob Iger: a board seat endorsement from Institutional Shareholder Services (ISS), an influential proxy-advisory firm. Disney’s upcoming shareholder meeting, scheduled for April 3, suddenly got a lot more interesting.

Activists: Endgame

ISS carries significant sway among Disney’s major investors. Some 20 years ago, in fact, the group helped push out longtime CEO Michael Eisner. This time around, ISS is still publicly backing Iger, but it’s casting doubt on the current board’s ability to pick the next Iger, who is due to retire for the second time in 2026 after they botched picking a successor the last time. Still with us? That’s why, in a report sent to shareholders on Thursday, the group recommended Peltz to the board, writing, “Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around.” Notably, ISS is not recommending shareholders vote for the other board member put forth by Peltz’s Trian Partners, former Disney CFO Jay Rasulo.

Iger and his team have had a busy start to the year convincing shareholders to rebuff Trian’s activist efforts, as well as similar efforts by smaller activist investor Blackwells Capital. In February, the company made a $1.5 billion investment in “Fortnite” video game studio Epic Games (imagine that: a giant entertainment company getting into an entertainment sub-industry that generates roughly seven-times more annual revenue than movies do), and announced a forthcoming sports streaming app joint-venture with Warner Bros. Discovery and Fox. 

The moves have sent Disney’s shares up some 30% year-to-date — enough for Iger to amass an Avengers-esque lineup of powerful allies ahead of the upcoming shareholder vote:

• Earlier this week, “Star Wars” creator George Lucas, who sold Lucasfilm to Disney in 2012 and remains one of the company’s largest individual investors, publicly urged all shareholders to vote for the 12 board members put forth by Disney. Lucas has been joined in his support by the descendants of Walt Disney, as well as Laurene Powell Jobs, another significant shareholder.
• Glass Lewis, another major proxy adviser, has also urged shareholders to back Disney’s board members, as has JP Morgan Chase CEO Jamie Dimon, whose bank has long supported Iger in the proxy fight.

Of Paramount Importance: Disney is far from the only legacy media company embroiled in drama this week. On Wednesday, The Wall Street Journal reported that private equity giant Apollo Global Management offered $11 billion to acquire Paramount Global’s film and TV studio, leading to a 12% share price bump. But by Thursday morning, the Financial Times reported that controlling shareholder Shari Redstone was unconvinced, sending Paramount’s share price tumbling. Sure, HBO’s “Succession” might be over, but hardcore fans can get their fix from real-life headlines about dysfunctional family dynasties.