Disney says Peltz ‘oblivious’ to media industry developments as board battle looms

Disney has reiterated its opposition to activist investor Nelson Peltz’s attempt to secure a seat on the company’s board in a letter to shareholders made public in its latest Securities and Exchange Commission filing.

Outlining its board’s reasoning in deciding not to recommend Peltz, Disney said that the latter and his Trian Group representatives “had not, actually presented a single strategic idea for Disney” when they presented to the board in January, “despite months of engagement” and that “their assessment of Disney seemed oblivious to the secular change that had been ongoing in the media industry, as well as the impact of the pandemic on each part of the Company’s business from production, to exhibition, to leisure travel”.

Disney also said that it considered Peltz’s “lack of media or technology industry experience coupled with his repeated focus in his presentation on successful approaches from businesses like Heinz, Procter & Gamble and DuPont which have little in common with Disney”.

The company indicated that it believed Peltz’s presence on the board would prove disruptive at a time when CEO Bob iger was set on implementing key changes.

Peltz has been highly critical of Disney’s performance under Iger and its acquisition of 21^st Century Fox, although, according to Disney, he said during his presentation that “he did not want to fire Mr. Iger but he did want to be in the board room”.

Disney revealed that an attempt by chair Susan Arnold to find a compromise with Peltz and his Trian Group investment vehicle – including quarterly meetings between Peltz and the board to assess progress – had been rebuffed. It said that “Peltz rejected this offer and said he would not be muzzled and that the Trian Group would be proceeding to a proxy contest immediately”.

Disney’s filing revealed that Peltz had lobbied for a seat on the board from mid-2022, before Trian Group had acquired a block of shares in the company, with support from Marvel Entertainment chairman Isaac Perlmutter. It said Perlmutter had lobbied to secure a board seat for Peltz and had indicated that both he and Peltz, who were supporters of former CEO Bob Chapek, believed Peltz’s presence on the board would reinforce Chapek’s position.