Disney says activist investor Nelson Peltz ‘does not understand’ its businesses

Disney has fired back at activist investor Nelson Peltz after the US billionaire attempted to mount a proxy battle in a bid to gain a seat on its board of directors.

Nelson Peltz

Peltz, who leads investment firm Trian Group, last week attacked Disney on multiple fronts, claiming the media giant had made questionable M&A moves, including overpaying for Fox; demonstrated a lack of overall cost discipline; shown a flawed direct-to-consumer (D2C) strategy; and lacked direction when in terms of succession planning. These factors, claimed Peltz, have caused Disney’s long-term shareholder value to decline.

Peltz made the claims at the same time as acknowledging Disney’s strong IP catalogue, diversified business mix and highly profitable parks business. “As such, we believe that the company’s current problems are primarily self-inflicted and need to be addressed immediately,” said Peltz in an SEC filing in which he also claimed he is not looking for CEO Bob Iger to be replaced or advocating for the various parts of Disney to be broken up.

Trian Group says it owns around 9.4 million shares in Disney, equating to a roughly US$900m stake. Peltz currently serves as the non-executive chairman of The Wendy’s Company and is also a director of Unilever and Madison Square Garden Sports Corp.

The Mouse House came out swinging on Tuesday, saying: “Peltz does not understand Disney’s businesses and lacks the skills and experience to assist the board in delivering shareholder value in a rapidly shifting media ecosystem.”

Disney’s board also defended Iger’s M&A track record, claiming the recently reappointed CEO had grown Disney’s market cap from US$49bn in 2005, when he first took the role, to US$231bn in 2020, when he initially stepped down, through the acquisition of assets including Pixar, Marvel and Lucasfilm.

The Mouse House also said its US$71bn acquisition of Fox was “critical to better position Disney to address key secular shifts in the media sector,” as well as broadening its portfolio of world-class IP, accelerating its D2C strategy and bringing with it a “deep bench” of executives including Dana Walden, John Landgraf, Craig Erwich and Courteney Monroe.

Disney, which said Peltz has asked to join the board “no less than” 20 times since July 2022, added that Peltz “has no track record in large cap media or tech” and “no solutions to offer for the evolving media landscape.”

As with most media companies, 2022 was a tough year on the stock market for Disney, which saw its share price drop from around US$155 per share to US$89. The start of 2023 has been more promising, with Disney’s price climbing to US$99.91 on Tuesday.

Last week, Disney revealed that Nike executive chairman Mark Parker had been elected as chairman of the board, succeeding outgoing chair Susan Arnold. In his new capacity, one of Parker’s roles will be to lead a committee created to identify and prepare a CEO successor to Iger.