Nelson Peltz isn’t abandoning proxy fight

Nelson Peltz isn’t abandoning proxy fight
Business

Nelson Peltz, founding partner and CEO of Trian Fund Management, speaks with CNBC’s Andrew Ross Sorkin on July 17, 2013 in New York.

Heidi Gutman | CNBC, NBCU Photo Bank, NBCUniversal via Getty Images

Are you not entertained, Nelson Peltz?

Disney shares jumped 6% in after-market trading Wednesday after the company posted earnings and flooded the zone with new announcements meant not only to excite its employees and shareholders, but also to put activist investor Nelson Peltz in his place.

Peltz has launched a proxy fight against Disney, asking investors to nominate him and former Disney Chief Financial Officer Jay Rasulo to replace current board members Michael Froman and Maria Elena Lagomasino. Both Disney’s higher profits, and string of content and partnership announcements, appeared to form a direct rebuttal to Peltz’s concerns about the company.

“The last thing we need right now is to be distracted by an activist or activists that have a different agenda and don’t understand our company,” Disney Chief Executive Bob Iger told CNBC’s Julia Boorstin in an interview Wednesday.

During his company’s first-quarter earnings conference call, he added, “we have turned the corner and entered a new era.”

Peltz, who first took a stake in Disney last year only to abandon and then renew his proxy fight threats, responded with a statement to CNBC that he won’t be backing down this time.

“It’s deja vu all over again,” Peltz’s firm Trian Fund Management said in a statement. “We saw this movie last year, and we didn’t like the ending.”

It was hard to keep up with Disney’s announcements this quarter:

  • ESPN finally set a launch date for its direct-to-consumer service: August or fall of 2025.
  • Disney is buying a $1.5 billion stake in Epic Games, the maker of Fortnite. It is Disney’s “biggest foray into the gaming space ever,” Iger said to Boorstin.
  • Taylor Swift’s Eras Tour film is coming to Disney+.
  • Disney upped its dividend by 50% versus the last dividend paid in January.
  • Disney announced a sequel to “Moana” is coming to theaters in November, which will likely be the studio’s biggest box office hit of the year.
  • Disney is on track to meet or exceed its $7.5 billion targeted spending cuts by the end of fiscal 2024.
  • The company said it expects full-year fiscal 2024 earnings will increase at least 20% over 2023.

All of these announcements came a day after Disney made more big news, revealing it’s launching a joint venture with Warner Bros. Discovery and Fox to offer ESPN in a new skinny bundle of linear networks that caters to sports fans later this year. It will be the first time cable cord-cutters and cord-nevers will have access to ESPN outside the traditional cable bundle.

It’s only logical that the mountain of announcements came this quarter, given activist pressure from Trian and Blackwells Capital. Iger has a vested interest in beating back critics of his performance and strategy.

Peltz has been vocal about bashing Iger’s leadership as shares have slumped in the past year, underperforming the S&P 500. Trian has launched a website, Restorethemagic.com, that claims Disney has “not performed for shareholders.”

“It saddens me that the board didn’t welcome me,” Peltz said last month. “This company is just not being run properly.”

Iger said he hasn’t spoken with Peltz recently and doesn’t intend to speak with him. In a filing last month, Disney said “in deciding not to recommend Mr. Peltz, the directors considered a number of factors, including that in a two year quest for a seat on the Disney Board, Mr. Peltz had not actually presented a single strategic idea for Disney.”

WATCH: Disney CEO Bob Iger on new streaming bundle partnership: ‘I’d rather be a disruptor.’

Disney CEO Bob Iger on new streaming bundle partnership: I'd rather be a disruptor than be disrupted

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