Prominent Investor extends support to Disney management

The Walt Disney Company announced this week that ValueAct Capital, a prominent activist hedge fund, is supporting the company amid a Board challenge from billionaire financier Nelson Peltz. This reflects a trend of activist investors, including Blackwells Capital, buying into Disney’s stock amidst challenges like a stagnant stock price and uncertainties in streaming, television networks, and succession planning.

Disney stated that ValueAct would back its Director nominees at the annual shareholder meeting, and in return, the company will engage in consultations with the $16 billion hedge fund. Disney’s CEO, Robert A. Iger, welcomed ValueAct’s input, citing the hedge fund’s collaborative track record. ValueAct’s co-chief executive, Mason Morfit, expressed excitement about partnering with Disney to lead the media industry forward in the digital age.

This agreement is part of Disney’s strategy to address investor concerns following the appointment of two new Directors in November. While ValueAct’s stake is smaller than Peltz’s, settling with the hedge fund helps Disney avoid potential issues. It’s unclear what it will take to reach an agreement with Peltz, who, along with partners Ike Perlmutter and Jay Rasulo, advocates for cost cuts, a revamped streaming strategy, and a clearer succession plan. Shareholders remain divided, with some supporting Peltz while others, like Blackwells, back Disney’s leadership, urging Peltz to focus on the company’s bright future.