Billionaire Peltz Ends Disney Proxy Fight With Disney As Stake Swells To $1.1 Billion

Topline

Billionaire Nelson Peltz’s proxy battle against Disney is over, the Trian hedge fund founder said Thursday morning on CNBC, giving his stamp of approval to the entertainment conglomerate’s unveiling of massive layoffs and corporate restructuring in its first earnings call of 2023 under boomerang CEO Bob Iger.

Key Facts

“The proxy fight is over,” Peltz said in a dramatic live phone call on Squawk on the Street shortly after an interview with Iger aired.

“Disney plans to do everything we wanted them to do,” Peltz added, declaring his month-long activist campaign a “great win.”

Trian revealed last month it took a roughly 0.5% stake in Disney and lobbied for shareholders to back Peltz’s nomination to Disney’s board of directors largely based on a platform of improving the company’s bottom line.

Peltz relented a day after Disney beat Wall Street’s profit and revenue estimates thanks in part to declining losses in its streaming business; that same day, Iger announced the company planned to let go 7,000 employees in a move that could save as much as $5.5 billion.

Big Number

More than $175 million. That’s how much Trian has profited on paper since disclosing January 11 it owned 9.4 million shares of Disney. That stake was worth $1.1 billion Thursday, a 20% increase from its roughly $900 million value upon the disclosure.

Key Background

Forbes estimates Peltz is worth $1.4 billion. Peltz’s activist campaign was largely met with confusion among investors—including some who believed his visionlacked a clear central thesis and centered largely on Disney’s 2017 purchase of 21st Century Fox. Loop Capital analyst Alan Gould called Peltz a “larger distraction than an asset” to Disney in a recent note to clients. Iger, 71, began a two-year tenure as Disney CEO in November, returning to the position he held for 15 years after Disney’s shaky two-year stretch under his successor Bob Chapek. Investors largely cheered on Iger’s return and stated commitment to improving Disney’s financials, with the stock up more than 20% since he came back to Disney. In addition to the cost-saving measures, Iger announced Thursday the company plans to once again make dividend payments to shareholders later this year after axing dividends in 2020. “The new (old) CEO is making his mark known,” Daiwa analyst Jonathan Kees wrote in a Wednesday note to clients.

Crucial Quote

“He has not articulated either a vision, or even ideas, that are of particular value to us,” Iger said Thursday about Peltz on CNBC.

Further Reading

Disney Will Reinstate Dividends, Cut 7,000 Jobs As Bob Iger Hones In On Bottom Line (Forbes)

Here’s Why Investors Are Bullish On Disney Despite Its Proxy Fight With Billionaire Peltz (Forbes)