Disney Emerges Victorious From Expensive, Months-Long Proxy Battle With Billionaire Activist Peltz - The Average Joe


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    Disney Emerges Victorious From Expensive, Months-Long Proxy Battle With Billionaire Activist Peltz

    Noah Weidner

    April 3, 2024

    For Bob Iger, life could be a dream… if only he stayed in retirement. Instead, he’s returned to replace Bob Chapek, his handpicked successor, just to re-inherit a $220B Rubik’s Cube to solve. On one side is Disney’s ($DIS) declining streaming growth; on the other are activist investors calling for change.

    End of the line: In recent months, billionaire activist investor Nelson Peltz and former Marvel Entertainment chairman Ike Perlmutter campaigned for Disney board seats — claiming the company had lost its magic and needed a new direction. But on Wednesday, Disney announced that shareholders voted overwhelmingly to keep Iger and the current board, rejecting the activists’ candidates.

    • Although proxy giant ISS backed Peltz ahead of the long-awaited vote, institutional giants BlackRock ($BLK) and Vanguard sided with Iger.
    • Peltz received just 31% of the votes, with individual shareholders, who own 40% of Disney, firmly supporting Iger.

    Spreading pixie dust

    Despite recent distractions, $DIS has climbed nearly 50% since last October but remains down almost 40% from its peak. Gerber Kawasaki’s president and co-founder told Bloomberg that “people are starting to recognize” that $DIS may be cheap relative to similar companies, especially Netflix ($NFLX). Analysts are becoming bullish as Iger moves from restructuring the business to actually growing it.

    • Disney finally has a clear streaming strategy combining Disney+, ESPN+, and Hulu — but questions remain if traditional linear TV networks like ABC and FX will be sold.
    • Investors are also eyeing Disney’s $1.5B investment and partnership with Fortnite creator Epic Games, which aims to expand Disney’s reach to younger consumers.

    The true cost: Disney’s proxy battle might go down in history as one of the most expensive, with Business Insider reporting over $70M spent by the company and activists to reach voters. However, if Iger and Disney’s management fail to deliver on promises, another campaign could quickly follow — but at least for now, the media giant gets its happy ending.

    Read: Proxy Elections Could Change Corporate America — But Most Americans Don’t Even Know About Them

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