The latest chapter in the Nelson Peltz saga with the Walt Disney Company is seeing Blackwells Capital group calling on Peltz’s Trian to end their “misguided and ego-driven campaign” that is seeking multiple spots on Disney’s board.
What’s Happening:
- Blackwells Capital is calling on activist investor and Trian Fund Management founder Nelson Peltz to end his renewed push for multiple seats on Disney’s board.
- The firm, a Disney shareholder since 2018, expressed concern in a statement on Thursday (in full below) that Trian’s campaign “prioritizes Mr. Peltz’s ego over what is best for all Disney shareholders,” and “may cost Disney shareholders upwards of $50 million and serve only as a value destructive fog for Disney’s leadership and Board.”
- Blackwells also said it does not believe that Trian’s efforts at Disney have or will serve the interests of long-term shareholders, with the statement citing Peltz’s involvement in The Wendy’s Company as a “cautionary tale for Disney shareholders.”
- Blackwells Capital was founded in 2016 by Jason Aintabi, its Chief Investment Officer. Since that time, it has made investments in public securities, engaging with management and boards, both publicly and privately, to help unlock value for stakeholders, including shareholders, employees and communities. Throughout their careers, Blackwells’ principals have invested globally on behalf of leading public and private equity firms and have held operating roles and served on the boards of media, energy, technology, insurance and real estate enterprises.
- This comes in response to recent reports that activist investor Nelson Peltz and his firm, Trian Partners, are seeking two seats on Disney’s board. This was announced the morning after Disney added Morgan Stanley CEO James Gorman and former Sky TV boss Jeremy Darroch to its board.
- In a Trian statement, the firm noted “While James Gorman and Sir Jeremy Darroch represent an improvement from the status quo, the addition of these directors will not, in our view, restore investor confidence or address the root cause behind the significant value destruction and missteps that this Board has overseen.”
- Peltz had been waiting to see what would happen with Disney's earnings report earlier in the month and then decide whether or not to make a move. Trian Partners oversees more than $3 billion in Disney shares, which belong to former Disney executive Ike Perlmutter.
- Previously, Peltz sought representation on the board and launched a proxy fight leading up to the company’s 2023 Meeting of Shareholders, but backed off those plans in February. Year to date, Disney shares are up about 6%, which is far below the S&P 500’s overall return.
- In response to Peltz’s announcement Disney said in a statement, “Mr. Peltz, in partnership with Isaac Perlmutter, a former Disney executive, intends to take its case to shareholders. Mr. Perlmutter owns 78% of the shares that Mr. Peltz claims beneficial ownership of, or more than 25 million of the 33 million shares. This dynamic is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors, as Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger, which may be different than that of all other shareholders.”
The Full Statement From Blackwells:
- Blackwells Capital LLC, a shareholder of The Walt Disney Company (“Disney” or the “Company”) (NYSE:DIS) since 2018, today issued its support for the ongoing transformative restructuring led by the Company’s CEO Bob Iger, and stewarded by an enviable Board of Directors recently enhanced through the appointments of James P. Gorman and Sir Jeremy Darroch. Displacing these individuals or other members of the Board with Mr. Peltz and other Trian selected nominees would deprive shareholders of valuable, experienced voices in the boardroom at a critical time in the Company’s history.
- Blackwells is concerned that Trian’s campaign prioritizes Mr. Peltz’s ego over what is best for all Disney shareholders, and that its latest effort may cost Disney shareholders upwards of $50 million and serve only as a value destructive fog for Disney’s leadership and Board.
- Moreover, Blackwells does not believe that Trian’s efforts at Disney, or indeed at other public companies, have necessarily served the interests of long-term shareholders. Trian and Mr. Peltz’s involvement at The Wendy’s Company (“Wendy’s”) (NASDAQ: WEN) serves as a cautionary tale for Disney shareholders. In an act of nepotism, Mr. Peltz installed his son, Matthew H. Peltz, as the non-executive Vice Chairman and packed the board with business partners and friends, while presiding over a period of disappointing results for Wendy’s shareholders.
- Jason Aintabi, Chief Investment Officer of Blackwells, commented, “Disney has one of the most attractive portfolios of beloved brands and businesses. The combined stewardship of the refreshed Board and the leadership of Mr. Iger, offer Disney shareholders the best opportunity to surface value. Mr. Peltz and Trian need to withdraw this costly and disruptive effort to displace experienced voices in the boardroom and substitute them with Mr. Peltz and his nominees.”
- Mr. Aintabi continued, “Mindless, drum-beating activism is not the right strategy for shareholders. Disney’s Board is acting in the best interests of all shareholders and should be allowed the time to focus on driving value at one of America’s most iconic companies without this fatuous sideshow.”