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Nelson Peltz Says Disney Proxy Fight Is Over Nelson Peltz Says Disney Proxy Fight Is Over By Lauren Thomas Dow Jones Nelson Peltz called off his proxy fight at Walt Disney Co. after the entertainment company unveiled a reorganization and cost-cutting plan that sent its shares higher. Mr. Peltz told The Wall Street Journal Thursday that the moves Disney announced Wednesday were similar to what he was planning to push for at the company. "He said all the things that we would want him to do," Mr. Peltz said of Disney Chief Executive Robert Iger. "Now they've got to execute." The 80-year-old activist investor earlier announced the surprise move in an interview on CNBC. Mr. Peltz's Trian Fund Management LP last month launched a fight for a seat on Disney's board after the company privately rebuffed his request to become a director. Disney shareholders were to vote on the matter at the company's annual meeting set for early April in what was expected to be one of the most high-profile proxy contests in years. Disney has been beset by challenges including big losses at its streaming business, political controversy and a sharp decline in its share price. The stock, which traded near $200 in March 2021, now changes hands at roughly $115. Disney said Wednesday that it plans to cut 7,000 jobs and slash $5.5 billion in costs as part of a corporate reorganization that will hand more power to the company's content executives and put a greater emphasis on sports media at the company. Mr. Iger announced the moves in his first earnings call since returning as chief executive. Many of them represent the reversal of moves made by his predecessor, Bob Chapek, who was dismissed by the company's board in November. Disney reported Wednesday that for its first fiscal quarter ended in December, the company's earnings rose to $1.28 billion from $1.1 billion a year earlier. Excluding certain items, per-share earnings fell to 99 cents from $1.06, while revenue increased 8% to $23.51 billion, with both numbers topping analysts' expectations. In a sign of the acrimony between the parties before Mr. Peltz's about-face, in an earlier CNBC interview on Thursday, Mr. Iger criticized the activist investor, saying he failed to articulate his own turnaround strategy. Mr. Iger said he wouldn't give in to Mr. Peltz's demand for a board seat. Robert Iger's Biggest Moves That Reshaped Disney "Disruption from a force like that is not something that would be healthy," Mr. Iger said, adding that the company was already working on some of Mr. Peltz's proposals before they became public. Mr. Peltz said he texted Mr. Iger this week to wish him happy birthday, which falls on Friday. He said that he told Mr. Iger, "I mean it." Mr. Peltz might not walk away from the fight empty-handed. He paid about $89.90 for the shares, which were up about 3% on Thursday morning. He still owns the shares and said he hasn't yet decided what to do with them, and might use them for charity. In preparation for the proxy battle, Mr. Peltz said his team had prepared a nearly 100-page white paper that would outline some of the crucial changes he had hoped to see at Disney. Trian had yet to release the paper, but Mr. Peltz had publicly articulated some of his views. Mr. Peltz said his decision to back down from a boardroom battle wasn't made in earnest until Wednesday evening, after he heard Mr. Iger outline many of his hoped-for changes on a conference call with analysts and investors. Among changes Mr. Peltz had hoped to see, Mr. Iger said that he would seek approval from the board to reinstate a modest dividend by the end of this calendar year, and that he hoped to boost the payout over time. Mr. Peltz will now avoid what would have been a costly undertaking with an uncertain outcome. Trian had said in its proxy materials that it could pay upward of $25 million to solicit votes from Disney shareholders, which include a large swath of individual investors. As of Jan. 31, it said it had already spent about $1.6 million. A proxy fight with Disney would have marked Trian's fourth such battle in the firm's history. It has launched battles against chemical producer DuPont Co., ketchup maker H.J. Heinz Co. and, most recently, in 2017 at Procter & Gamble Co. The firm's track record has been mixed, winning board seats at Heinz and P&G while failing to do so at DuPont. Mr. Peltz recently joined the board of Unilever PLC. Nelson Peltz called off his proxy fight at Walt Disney Co. after the entertainment company unveiled a reorganization and cost-cutting plan that sent its shares higher. Mr. Peltz told The Wall Street Journal Thursday that the moves Disney announced Wednesday were similar to what he was planning to push for at the company. "He said all the things that we would want him to do," Mr. Peltz said of Disney Chief Executive Robert Iger. "Now they've got to execute." The 80-year-old activist investor earlier announced the surprise move in an interview on CNBC. Mr. Peltz's Trian Fund Management LP last month launched a fight for a seat on Disney's board after the company privately rebuffed his request to become a director. Disney shareholders were to vote on the matter at the company's annual meeting set for early April in what was expected to be one of the most high-profile proxy contests in years. Disney has been beset by challenges including big losses at its streaming business, political controversy and a sharp decline in its share price. The stock, which traded near $200 in March 2021, now changes hands at roughly $115. Disney said Wednesday that it plans to cut 7,000 jobs and slash $5.5 billion in costs as part of a corporate reorganization that will hand more power to the company's content executives and put a greater emphasis on sports media at the company. Mr. Iger announced the moves in his first earnings call since returning as chief executive. Many of them represent the reversal of moves made by his predecessor, Bob Chapek, who was dismissed by the company's board in November. Disney reported Wednesday that for its first fiscal quarter ended in December, the company's earnings rose to $1.28 billion from $1.1 billion a year earlier. Excluding certain items, per-share earnings fell to 99 cents from $1.06, while revenue increased 8% to $23.51 billion, with both numbers topping analysts' expectations. In a sign of the acrimony between the parties before Mr. Peltz's about-face, in an earlier CNBC interview on Thursday, Mr. Iger criticized the activist investor, saying he failed to articulate his own turnaround strategy. Mr. Iger said he wouldn't give in to Mr. Peltz's demand for a board seat. Robert Iger's Biggest Moves That Reshaped Disney "Disruption from a force like that is not something that would be healthy," Mr. Iger said, adding that the company was already working on some of Mr. Peltz's proposals before they became public. Mr. Peltz said he texted Mr. Iger this week to wish him happy birthday, which falls on Friday. He said that he told Mr. Iger, "I mean it." Mr. Peltz might not walk away from the fight empty-handed. He paid about $89.90 for the shares, which were up about 3% on Thursday morning. He still owns the shares and said he hasn't yet decided what to do with them, and might use them for charity. In preparation for the proxy battle, Mr. Peltz said his team had prepared a nearly 100-page white paper that would outline some of the crucial changes he had hoped to see at Disney. Trian had yet to release the paper, but Mr. Peltz had publicly articulated some of his views. Mr. Peltz said his decision to back down from a boardroom battle wasn't made in earnest until Wednesday evening, after he heard Mr. Iger outline many of his hoped-for changes on a conference call with analysts and investors. Among changes Mr. Peltz had hoped to see, Mr. Iger said that he would seek approval from the board to reinstate a modest dividend by the end of this calendar year, and that he hoped to boost the payout over time. Mr. Peltz will now avoid what would have been a costly undertaking with an uncertain outcome. Trian had said in its proxy materials that it could pay upward of $25 million to solicit votes from Disney shareholders, which include a large swath of individual investors. As of Jan. 31, it said it had already spent about $1.6 million. A proxy fight with Disney would have marked Trian's fourth such battle in the firm's history. It has launched battles against chemical producer DuPont Co., ketchup maker H.J. Heinz Co. and, most recently, in 2017 at Procter & Gamble Co. The firm's track record has been mixed, winning board seats at Heinz and P&G while failing to do so at DuPont. Mr. Peltz recently joined the board of Unilever PLC. |
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