It’s taken several years, but Bob Iger has finally won the battle against Nelson Peltz. The activist investor of the Trian fund has sold his entire stake in Disney, according to the CNBC network. The deal comes nearly two months after Peltz failed in his attempt to place two executives on the media giant’s board of directors. The tense campaign pitted the views of the veteran investor against that of the CEO. Iger’s candidates obtained the support of 75% of shareholders while Peltz and his partner received only 31% of the votes.
Peltz, 81, obtained about $1 billion from the operation, according to the specialized media, who cites a person with knowledge of the transaction as a source. As of Wednesday afternoon, Disney had not confirmed the sale of one of its largest shareholders. Trian controlled about $3.5 billion of Disney, although the vast majority of these shares are owned by Ike Perlmutter, Peltz’s partner, and a veteran executive who was key in the rise of Marvel as a growth lever for the company’s business.
Iger came out of retirement in November 2022 to take charge of the company in a second stage during a period of crisis. Perlmutter was fired from the company a few months later as part of a strategy put forward by Iger to reduce costs. The exit also contained a gesture of resentment. The poor relationship between the executive and the CEO is well known in Hollywood. When Iger showed him the door, Perlmutter elevated his battle with Peltz, an old friend, against Disney’s top executive.
Peltz began a campaign to get on the council after Iger’s return. Trian had March 2023 about 900 million invested in Disney, about 9.4 million shares. Peltz then became the critical voice of the company’s management. He assured that the purchase of 21st Century Fox, closed by Iger for 71 billion in 2019, had been a mistake. He reproached the CEO for not having planned his succession correctly and disapproved of the company’s waste, especially in the decisions of his film studio. Peltz claimed that all this had weighed down the share price.
In February 2023, Disney announced a restructuring in which it laid off 7,000 employees and cut expenses to save $5.5 billion. Peltz considered the move a victory for his cause. So he then declared peace in his fight to try to penetrate the board of directors. The truce did not last. The veteran investor returned to the fray in the fall with a new campaign in which he sought a seat for himself and another for Jay Rasulo, a former Disney employee who left the company in 2015.
Shareholders decided to support Iger in the April 3 election, held during the annual meeting. The message to Trian was resounding. Disney prevailed at the bottom for the second time in two years. Investors once again bet on Iger’s vision. This, for now, seems to be working. The titles have appreciated 11% so far in 2024, reaching $100 per unit.
The panorama of Trian is more complex after the battle. The fund has had low profits for years. Last year, for example, it had its worst results since 2012. Its package of shares in the media giant had generated around $300 million until April, an insufficient figure for what the partners predicted with their bet. This spring’s fiasco forced the group to focus on another of its big bets, on the British multinational Unilever. The episode has made several analysts wonder if Peltz has lost his power after failing to get support from giants like BlackRock and Vanguard in his dog-eat-dog fight with Bob Iger.
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