Disney heirs are lining up against activist investors
It’s a classic Disney movie plot: a family comes together to fight an enemy.
Only this time it’s happening in real life, with the grandchildren of Walt and Roy Disney, who founded the company in 1923, joining forces to oppose Nelson Peltz, the activist investor waging a proxy battle for board seats. The heirs — nine in all, including Abigail E. Disney, who has sometimes been a harsh critic of Disney CEO Robert A. Iger — publicly stood behind Mr. Iger and the current Disney board on Thursday.
“These activists must be defeated,” Roy P. Disney, 66, said by phone. “They are not interested in preserving the Disney magic, but in stripping it to its bare bones to make a quick profit for themselves.”
In a statement, a spokesperson for Trian Partners, the investment firm that Mr. Peltz leads, said: “We love Disney and recognize that building on its rich history of delighting loyal fans is essential to its future success. Trian invests in great companies like Disney and helps them grow and prosper over the long term – and we have the track record to prove this with companies like P&G, Heinz and Mondelez.”
Mr. Disney, a grandson of Roy Disney, has three siblings: Abigail, Susan Disney Lord and Tim Disney. In a letter to Disney shareholders, seen by The New York Times, they call Mr. Peltz and a handful of other activist investors surrounding Disney “wolves in sheep’s clothing.”
“It is imperative that the strategy that Bob Iger, his management team and the board of directors have implemented is not disrupted,” the letter said. Their cousins, grandchildren of Walt Disney, sent a letter of their own echoing these sentiments.
Abigail Disney, 64, whose 2022 documentary “The American Dream and Other Fairy Tales” attacked Disney over pay inequality, added by phone: “I have my differences with Bob Iger, but I’m sure the worst that could happen what happens to the company is Nelson Peltz.”
Mr. Peltz, 81, is campaigning for two seats on Disney’s board of 12, one for himself and one for James A. Rasulo, 68, a former Disney chief financial officer who left in 2015 after being passed over as Mr. Iger’s heir apparent. Mr. Peltz matches Ike Perlmutter, 80, a sharp-elbowed former Disney employee who is one of the company’s largest independent shareholders. Mr. Perlmutter, who sold Marvel Entertainment to Disney in 2009, was ousted from the company last year.
Mr. Perlmutter had – from his position within Disney – agitated to have Mr. Peltz join the board in 2022. When he was rejected, Mr. Peltz launched a proxy battle, saying he would cut costs, revamp Disney’s streaming business and clean up the house. messy corporate succession planning. He withdrew after Disney restructured and announced $5.5 billion in cuts. (It ended up closer to $7.5 billion.)
The couple reappeared in Octoberciting Disney’s languishing stock price and the mishandling of Disney’s leadership succession plan.
“Fundamentally and broadly speaking, we want the shares to rise,” Mr. Peltz said in a statement video message on Restore the Magic, a site that lays out his case for a board shake-up. In a video posted on X on Wednesday, Mr. Peltz said, “We love Disney. We think it’s part of Americana.”
This month, after Disney reported strong quarterly results and announced a partnership with Epic Games, shares rose. Disney was trading at about $111.50 on Thursday, up 23 percent since the beginning of the year. However, shares peaked at nearly $200 in March 2021.
The sparring around Disney extends beyond Mr. Peltz. Blackwells Capital, a hedge fund, does looking for three seats on Disney’s board and says Mr. Iger, 73, needs help navigating the rapidly changing media and technology companies; Disney opposes the attempt. Another activist investor, ValueAct, is backing Disney amid challenges from Trian and Blackwells.
The proxy battles will come to a head on April 3, when Disney holds its annual shareholder meeting. (It will take place online.)
“I approach Disney every day with a deep sense of respect for all that Walt and Roy have created, and it is incredibly meaningful to have the support of their families,” Mr. Iger said in an email. “We are committed to protecting their legacy as we chart Disney’s future.”
The Disney family has not been involved in running the company since Roy E. Disney – the father of Abigail, Susan, Tim and Roy P. Disney – resigned from the board of directors in 2003. He then led a shareholder revolt that resulted in Michael D. Eisner’s resignation as CEO and Mr. Iger’s rise to the top of the company. Roy E. Disney died in 2009.
It’s worth noting that the Disney family used to run an activist investment fund, Shamrock Companiesthat played a major role in the 2003 shakeup of what was also an underperforming Disney company.
Roy P. Disney said he and his family members will continue to own shares; he declined to increase stakes, but analysts say the Disney family has a relatively small position. He said Disney has not sought their help in its fight to fend off Mr. Peltz and his fellow activists. He said they decided to speak out because Mr. Peltz’s campaign reminded them of a bitter episode in 1984, when corporate raider Saul Steinberg took over the company. Mr. Steinberg was eventually beaten back.
Mr. Disney and his siblings were joined Thursday by five cousins (Walter Elias Disney Miller, Tamara Diane Miller, Jennifer Miller-Goff, Joanna Sharon Miller and Michelle Lund) who also expressed support for Mr. Iger, albeit less emotions.
“As a family of Walt Disney, we support the management of Walt Disney Company and its board of directors and oppose the nominations of Nelson Peltz,” they said in their letter. “There have been challenging times, but current management has adapted and grown through these challenges.”
Michelle Lund, whose mother, Sharon Disney Lund, was one of Walt Disney’s daughters, added in an email: “Disney started as a family business, and even though it has grown into such a large global company, Disney is still about family. My mother would be shocked by these activists’ attempts to infiltrate the company.”