By Svea Herbst-Bayliss
(Reuters) -Nelson Peltz is planning a new board challenge at Walt Disney less than 10 months after the home of Mickey Mouse laid out plans that addressed the activist investor’s criticism.
As Disney’s stock price has tumbled 30% since then, the 82-year-old billionaire investor is now expected to ask the company for “multiple” board seats, including one for himself, a person familiar with the matter said on Monday.
Peltz’s Trian Fund Management owns roughly $2.5 billion, or more than 30 million shares, in Disney, making it one of the entertainment giant’s largest investors, said the person who declined to be identified because the discussions are private.
The Wall Street Journal was first to report Peltz’s push for board seats.
The New York-based hedge fund increased its ownership five-fold since the end of the second quarter when a regulatory filing showed it owning 6.4 million Disney shares.
A Trian representative declined to comment. A Disney representative did not respond to a request for comment.
Trian pushed for one board seat for Peltz in January but ended its proxy fight in early February, saying he would e watching and cheering Disney from the sidelines, after its chief Bob Iger laid out plans to fix the company. Disney had rejected Peltz as a possible board member.
But with Disney’s share price dropping from its early February year high of $113.21 to $78.85 on Wednesday, the applause has ended and Peltz is now expected to push hard to join the 11-member board. Disney’s stock price climbed 1.29% on Monday to trade at $83.99 as the broader market was mixed.
If Disney should again deny Peltz’s request to join the board, Trian could nominate director candidates between Dec. 5 and Jan. 4, laying the path for shareholders to vote on who they would like to see overseeing company strategy.
During the heated but short-lived proxy battle earlier this year, Disney said Peltz, whose firm owned roughly $1 billion worth of Disney stock at the time, did not have the right skills. Trian has about $9 billion in assets.
Facing trouble last year, Disney’s board brought Iger out of retirement in November for a second turn at running the company. At first his plans to cut jobs and save $5.5 billion appealed to investors.
Peltz, who had pushed Disney to clarify its succession planning, revamp its streaming business, cut costs and bring back its dividend, said in February the new operating initiatives Iger laid out dovetailed with his thinking.
Iger during the company’s third-quarter earnings call in August said the company was mulling strategic partnerships for its marquee sports brand ESPN.
Since the end of the proxy fight, Trian has revamped its top ranks when Ed Garden, one of Trian’s three founding partners and its long-serving chief investment officer, left the firm. Peltz’s son, Matthew, was promoted to co-chief investment officer with Josh Frank.
Corporate governance experts noted the timing of Peltz’s second board challenge – far in advance of a possible shareholder vote – could favor the company by giving it a roadmap of the hedge fund’s demands and more time to fix problems.
(Reporting by Svea Herbst-Bayliss in Rhode Island and Urvi Dugar in Bengaluru; Editing by Krishna Chandra Eluri, Savio D’Souza and Tomasz Janowski)
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