Disney Goes on the Offensive Against Nelson Peltz, Releases ‘Fact vs. Fiction’ Document
The Walt Disney Company is going on the offensive against Nelson Peltz and his Trian Investors, releasing a point-by-point refute to some of the activist investor’s biggest claims.
In a new release titled Fact vs. Fiction, Disney bluntly stated, “The truth matters. Shareholders rightfully expect directors to base their statements on facts. The activists and their nominees have not lived up to this expectation.”
Here is a breakdown of what Disney had to say.
Does Nelson Peltz Have Media Expertise?
The first claim that Disney refuted was Nelson Peltz’s claim that he has media expertise. Peltz had made this assertion in a letter to shareholders.
In response, Disney simply quoted Peltz himself.
“By the way, they said I had no media experience. I don’t claim to have any,” Peltz told CNBC on January 18, 2024.
Jay Rasulo’s Value to Diseny
In response to Trian’s claim that Jay Rasulo’s media experience and business acumen will help the Disney Board, Disney hit back hard.
“Mr. Rasulo left Disney in 2016, and eight years later, his perspective on the media industry is stale. Since he joined the iHeartMedia Board in May 2019 as Lead Independent Director, the stock has declined by 90%,” Disney said.
Does Peltz Speak For Shareholders?
Nelson Peltz has claimed that Trian Partners has a stake of over $3 billion in Disney stock and speaks for shareholders.
According to Disney, however, Trian has decreased its stake in Disney from 9.4 million shares to 6.8 million shares over the last year.
Instead, Trian’s position is largely made up of shares owned by Isaac Perlmutter. According to Disney, Perlmutter owns 25.6 million shares, making up the lion’s share of Trian’s position.
Petlz’s Previous Successes
Nelson Peltz has publicly claimed that the boards on which he has sat have, on average, outperformed the S&P by 900pbs annually.
Diving into the details, Disney revealed that Peltz or Trian have underperformed the S&P 500 in about 68% of cases.
Have Disney and Peltz Met?
Trian has continually claimed that Disney has refused to engage with Nelson Peltz.
In response, Disney has claimed that since Nelson Peltz ended his first proxy battle, the board has continued to have an open dialogue with Trian. In total, they have had at least 20 meaningful interactions.
According to Disney, Peltz was also offered the opportunity to meet with the Disney Board and Disney leaders in late 2023 and declined the invitation.
Disney’s Openness to Ideas
In response to Trian’s claims that the Disney Board is closed to new ideas and has refused input from shareholders, Disney touted its recent creative ideas.
“Over the past 18 months, Mr. Peltz has resurfaced old ideas which have been considered and dismissed, suggested actions that already were in motion, or proposed ideas that demonstrate a complete lack of understanding of the media ecosystem (e.g., a Board committee to review content, or licensing ESPN+ to NFLX),” Disney said.
“He and Trian’s other nominee Mr. Rasulo offer no additive relevant experience to our independent, highly qualified Board.
“Disney is always open to constructive advice and engagement with shareholders, as evidenced by our recent information-sharing arrangements with ValueAct Capital and our support agreement with Third Point.”
The Profitability of Disney+
In response to Peltz’s claim that Disney+ has been managed poorly, Disney touted the streamer’s recent success.
“Disney has built the second largest global streaming platform with more than 180 million subscriptions across Disney+, Hulu and ESPN+. We are competitively differentiated by our IP, global scale and #1 sports media brand, ESPN. We expect to achieve profitability by the of end of FY24, within five years of launching Disney+ in a significantly more competitive streaming landscape,” the company wrote.
Disney and Peltz’s proxy battle will come to a head on April 3, 2024. Until then, Peltz will continue to be a thorn in Bob Iger’s side.
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