Disney heirs align against Nelson Peltz and activist investors

It’s a classic Disney movie plot: a family comes together to fight an enemy.

But 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 who is leading a proxy battle for board seats. The heirs — nine in total, including Abigail E. Disney, who has at times been a harsh critic of Robert A. Iger, Disney’s chief executive — publicly stood behind Mr. Iger and the current Disney board on Thursday .

“These activists must be defeated,” Roy P. Disney, 66, said by telephone. “They don’t want to preserve the Disney magic, but strip it to the bone to make a quick profit for themselves.”

In a statement, a spokesperson for Trian Partners, the investment firm led by Mr. Peltz, said: “We love Disney and recognize that building on its rich history of delighting its 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 experience to deliver that to companies like P&G, Heinz and Mondelez.

Mr. Disney, 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 called Mr. Peltz and a handful of other activist investors circling Disney “wolves in sheep’s clothing.”

“It is imperative that the strategy implemented by Bob Iger, his management team and the Board of Directors is not disrupted,” the letter states. Their cousins, Walt Disney’s grandchildren, sent a letter echoing these sentiments.

Abigail Disney, 64, whose 2022 documentary, “The American Dream and Other Fairy Tales,” attacked Disney for wage inequality, added by phone: “I have my differences with Bob Iger, but I know for a fact that the worst thing that could happen to the company is Nelson Peltz.

Mr. Peltz, 81, is campaigning for two seats on the Disney board, one for himself and one for James A. Rasulo, 68, a former Disney chief financial officer who left the company in 2015 after being passed over as Mr. Iger’s heir apparent. Mr. Peltz is aligned with 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 forced out of the company last year.

Mr. Perlmutter had campaigned — from his seat at Disney — for Mr. Peltz to join the board in 2022. When he was rebuffed, Mr. Peltz launched a proxy battle, saying he would cut costs, revamp Disney’s streaming business and clean up the environment. disorderly business succession planning. He stepped down after Disney restructured and announced $5.5 billion in cuts. (It ended up being closer to $7.5 billion.)

The pair reappeared in Octoberciting Disney’s sluggish stock price and mismanagement of Disney’s succession plan.

“Fundamentally and crudely, we want the stock to rise,” Mr. Peltz said in a statement. video message on Restore the Magic, a site that presents his case for a board shakeup. In a video published on 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 soared. Disney was trading at around $111.50 on Thursday, up 23% year to date. Shares, however, peaked at nearly $200 in March 2021.

The fights over Disney extend beyond Mr. Peltz. Blackwells Capital, a hedge fund, is looking for three seats to the Disney board, saying Mr. Iger, 73, needs help navigating the rapidly changing media and technology industries; Disney opposes this effort. Another activist investor, ValueAct, supports Disney amid the Trian and Blackwells challenges.

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 each day at Disney with a deep sense of respect for everything Walt and Roy 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 while charting a path forward for Disney.”

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 in 2003. He then led a shareholder revolt that resulted in Michael D. Eisner’s resignation as chief executive and Mr. Iger’s ascension to the helm of the company. Roy E. Disney died in 2009.

It should be noted that the Disney family once ran an activist investment fund, Clover Titleswho 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 continue to own shares; I declined to specify the size of the holdings, but analysts say the Disney family is in a relatively small position. He said Disney had not asked for their help in its fight to push back 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 joined the company. Mr. Steinberg was ultimately rebuffed.

Mr. Disney and his siblings were joined on Thursday by five cousins ​​(Walter Elias Disney Miller, Tamara Diane Miller, Jennifer Miller-Goff, Joanna Sharon Miller and Michelle Lund) who also expressed their support for Mr. Iger, although with less emotion. .

“As the Walt Disney family, we support the management of the Walt Disney Company and its Board of Directors, and we oppose the nominations proposed by Nelson Peltz,” they said in their letter. “There have been difficult times, but the 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 although it has grown into such a large global company, Disney is always a family affair. “My mother would be appalled by these activists’ attempts to force their way into the business.”