Disney emerges victorious in board battle against activist investors

Walt Disney shareholders have spoken, backing Chief Executive Bob Iger and the company's current board members, thereby invalidating a campaign led by activist investors Nelson Peltz and Blackwells Capital.

The shareholder vote, announced at Disney's annual meeting, concludes a contentious battle pushed by accusations of underperformance in the streaming-television era.

Following the shareholder vote, Iger expressed relief that the distracting proxy contest was behind them, allowing the company to refocus on growth and value creation.

Add WION as a Preferred Source

However, Disney's board still faces the task of finding a successor to the 72-year-old Iger before his scheduled retirement in 2026.

Board members have reassured shareholders that candidates vetted diligently.

Analysts note that Disney's next steps will be extremely important, particularly towards making the streaming television unit profitable and launching an app for its flagship ESPN sports network.

Failure to achieve desired results within the next year could potentially lead to shifts in investor sentiment, analysts warn.

Despite the victory for Disney, its shares declined by 3.2 per cent late on Wednesday afternoon.

Peltz and Blackwells had sought five board seats collectively, criticising Disney's CEO succession planning, creative direction, and technological adaptation.

The battle between Disney and the activist investors was marked by extensive campaigns and public attacks.

Peltz, who was seeking a board seat for himself and former Disney CFO Jay Rasulo, faced resistance from Disney, which argued against their suitability for the board.

Despite the confrontation, Iger garnered overwhelming support from shareholders, receiving backing from 94 per cent of voting shareholders.

Trian Fund Management, Peltz's investment firm, remains Disney's fifth-largest shareholder, holding a 1.76 per cent stake.

Although disappointed by the outcome, Trian acknowledged Disney's stock price appreciation since the launch of their campaign.

Disney's shares have surged approximately 31 per cent this year, backed by positive earnings and initiatives like investments in Epic Games and partnerships with Fox Corp and Warner Bros Discovery.

Blackwells Capital, expressed satisfaction in keeping Peltz out of Disney's boardroom.

Despite their unsuccessful bid for board seats, Blackwells believes any of their candidates could have contributed to advancing Disney's interests over the coming years.

(With inputs from Reuters)