Disney, number one Iger towards victory in battle with activists

Disney, number one Iger towards victory in battle with activists


MILAN – The battle to turn around Disney is moving towards a victory for its board, and in particular for the number one Bob Igercapable of uniting a sufficient number of votes to defend itself from attacks by activist funds.

The definitive truth is awaited by the shareholders’ meeting, but the Anglo-Saxon financial press is convinced that the game is now over and that Nelson Peltz’s Trian Fund Management hedge fund will not succeed in its intent to enter the control room of the company entertainment, with Peltz himself and former Disney CFO Jay Rasulo.

According to the sources of Reuters, by Tuesday evening – without prejudice to the possibility of last minute changes of mind – there were sufficient forces aligned on Iger’s side. The CEO was recalled to Disney in 2022, after the long years of his command and a parenthesis of not even three years that seemed to open up to his succession, but resulted in a return to the past.

In the six months of battle with the activist, Iger deployed his entire network of relationships with Wall Street to win the challenge. The head of JpMorgan, Jamie Dimonas reconstructed by Financial Times offered him support. As well as exponents of the Disney dynasty, and prominent shareholders such as the creator of Star Wars, George Lucas. Norges Bank, T-Rowe Price and other important partners did not miss their support. On the other hand, Peltz brought the proxy advisor’s papers Iss and the California pension fund Calpersbut apparently it wasn’t enough to break Iger’s castle.

Which on the other hand has recently also taken care to make itself well-liked by the market: it has ensured an improvement in cash generation, billion-dollar investments in Epic Games, cost cutting in order to increase the dividend by +50% and launch a share buyback program (one of the ways to satisfy the desire of investors to liquidate the stock under favorable conditions) worth 3 billion.

The criticisms leveled by the activist against Iger focused on the delay in developing the streaming strategy, on having overpaid Fox (71 billion in 2019) and on not having given a boost to the creative capacity of its productions. Peltz (already present in battles in P&G or Heinz) also accused Disney of a “woke” strategy unsuccessful in its own words, with an overrepresentation of women and characters of color in titles such as Marvel and Black Panther. On the excess of “political correctness”On the other hand, Iger also criticized himself with a call to his creative team. Among the points discussed, also the succession plan of Iger himself who is currently under contract until 2026.

If nothing else, Peltz can get credit for having contributed to reviving the title. Iger’s countermoves to his activist initiative have in fact generated an increase of about a third in the stock this year. And to think that, since the post-Covid streaming bubble (there was a peak at $197 in March 2021), Disney stock was in constant decline. Now the price is around 123 dollars.

Blackwells Capital, another hedge fund, had also tried to get involved by proposing three candidates for the board, without success.


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