It’s a classic Disney movie plot: a family comes together to fight an enemy.
Only this time it’s happening in real life: The grandsons of Walt and Roy Disney, who founded the company in 1923, band together to take on Nelson Peltz, the activist investor waging a proxy fight for board seats. The heirs – nine in all, including Abigail E. Disney, who was at times a harsh critic of Disney CEO Robert A. Iger – publicly stood behind Mr. Iger and the current Disney board on Thursday.
“These activists must be defeated,” Roy P. Disney, 66, said by phone. “They are not interested in preserving the Disney magic, but rather stripping it down to the bare bones for a quick profit.”
In a statement, a spokesman for Trian Partners, the investment firm that Mr. Peltz runs, said: “We love Disney and recognize that building on its rich history of delighting loyal fans is critical to its future success.” Trian invests in great companies like Disney, helping them grow and prosper over the long term – and we have the track record to prove this with companies like P&G, Heinz and Mondelez.”
Mr. Disney, a grandson of Roy Disney, has three siblings: Abigail, Susan Disney Lord and Tim Disney. In a letter to Disney shareholders seen by The New York Times, they call Mr. Peltz and a handful of other activist investors surrounding Disney “wolves in sheep’s clothing.”
“It is imperative that the strategy implemented by Bob Iger, his management team and the Board of Directors not be disrupted,” the letter said. Her cousins, grandchildren of Walt Disney, sent a letter of their own expressing these sentiments.
Abigail Disney, 64, whose 2022 documentary “The American Dream and Other Fairy Tales” attacked Disney over pay inequality, added by phone: “I have differences with Bob Iger, but I know for a fact that the worst could happen.” The company happens to be Nelson Peltz.”
Mr. Peltz, 81, is fighting for two seats on Disney’s 12-member board, one for himself and one for James A. Rasulo, 68, a former Disney chief financial officer who left the company in 2015 after becoming Mr. Iger’s heir was obviously ignored. Mr. Peltz is aligned with Ike Perlmutter, 80, a sharp-elbowed former Disney employee who is one of the company’s largest independent shareholders. Mr. Perlmutter, who sold Marvel Entertainment to Disney in 2009, was forced out of the company last year.
Mr. Perlmutter had advocated — from his perch at Disney — for Mr. Peltz to join the board in 2022. When he was rebuffed, Mr. Peltz launched a proxy war, saying he would cut costs, revamp Disney’s streaming business and clean up the company’s messy succession planning. He retired after Disney restructured and announced $5.5 billion in cuts. (It ended up being closer to $7.5 billion.)
The pair resurfaced in October, citing Disney’s weakening stock price and the mishandling of Disney’s leadership succession plan.
“Fundamentally and broadly speaking, we want the stock to go up,” Mr. Peltz said in a video message on Restore the Magic, a website that lays out his case for a board shakeup. In a video posted on X on Wednesday, Mr Peltz said: “We love Disney. We believe it’s part of Americana.”
After Disney reported strong quarterly results this month and announced a partnership with Epic Games, shares soared. Disney was trading at about $111.50 on Thursday, up 23 percent since the start of the year. However, shares peaked at nearly $200 in March 2021.
The controversy over Disney goes beyond Mr. Peltz. Blackwells Capital, a hedge fund, is seeking three seats on Disney’s board and says Mr. Iger, 73, needs help navigating the rapidly changing media and technology businesses; Disney rejects the attempt. Another activist investor, ValueAct, is backing Disney amid the Trian and Blackwells challenges.
The proxy battles will reach a climax on April 3, when Disney holds its annual shareholder meeting. (It is carried out online.)
“I approach every day at Disney with deep respect for everything Walt and Roy created, and having the support of their families is incredibly important,” Mr. Iger said in an email. “We are committed to protecting their legacy as we plan Disney’s path forward.”
The Disney family has not been involved in running the company since Roy E. Disney – the father of Abigail, Susan, Tim and Roy P. Disney – left the board in 2003. He then led a shareholder revolt that resulted in Michael D. Eisner’s resignation as CEO and Mr. Iger’s rise to the top of the company. Roy E. Disney died in 2009.
It’s worth noting that the Disney family previously ran an activist investment fund called Shamrock Holdings, which played a major role in the 2003 restructuring of an also underperforming Disney company.
Roy P. Disney said he and his family members continue to hold shares; He declined to quantify the holdings, but analysts say the Disney family has a relatively small stake. He said Disney had not asked them for help in the fight against Mr. Peltz and his fellow activists. He said they decided to speak out because Mr. Peltz’s campaign reminded them of a bitter episode in 1984 when corporate raider Saul Steinberg took over the company. Mr. Steinberg was ultimately repulsed.
Mr. Disney and his siblings were joined on Thursday by five cousins (Walter Elias Disney Miller, Tamara Diane Miller, Jennifer Miller-Goff, Joanna Sharon Miller and Michelle Lund), who also expressed their support for Mr. Iger, albeit with less emotions.
“As the Walt Disney family, we support The Walt Disney Company management and its Board of Directors and reject the nominations of Nelson Peltz,” their letter said. “There have been challenging times, but the current management has adapted and grown to meet these challenges.”
Michelle Lund, whose mother, Sharon Disney Lund, was one of Walt Disney’s daughters, added in an email: “Disney started as a family business, and although it has grown into such a large global company, Disney always works nor about family.” My mother would be horrified by these activists’ attempts to break into the company.”
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2024-02-29 22:00:13
www.nytimes.com
