Activist Investor ValueAct Capital Is Building a Stake in Disney (Report)

The firm’s move comes as Trian Fund Management founder Nelson Peltz is eyeing his own push for a board seat at the entertainment giant

Disney Diane Jurgens
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Activist investor pressure is ramping up against Disney as the San Francisco-based firm ValueAct Capital is reportedly building a “significant stake” in the entertainment giant.

CNBC’s Activist Spotlight reports that ValueAct began buying Disney stock during the Writers’ Guild of America and SAG-AFTRA strikes and that the company is one of its largest positions. It values Disney’s theme parks and consumer products division alone in the low 80s per share. The report adds that ValueAct has been in a dialogue with Disney’s management and is still growing its position.

Representatives for ValueAct and Disney did not immediately return TheWrap’s request for comment. Disney shares climbed over 3% following the report.

ValueAct’s move comes as Trian Fund Management founder Nelson Peltz is making a renewed push for multiple seats on Disney’s board after backing off of a proxy fight in February.

Peltz’s latest effort is backed by former Marvel Entertainment chairman Ike Perlmutter, who has granted Trian sole voting power over his shares in the entertainment giant.

According to a 13D filed with the U.S. Securities and Exchange Commission on Tuesday, Trian has upped its Disney stake to 7.3 million shares during the third quarter of 2023, compared to 6.42 million shares during the second quarter. The filing also discloses another 25.57 million Disney shares listed as an “other investment discretion.”

“I don’t have specifics about what Nelson is really after or what he will ask for,” Disney CEO Bob Iger told CNBC in an interview following the release of its fourth quarter earnings on Nov. 8. “I will say that as is the case has been the case in the past, the management and the board is always willing to listen to what shareholders have to say. You know, we’re in lockstep with the board in terms of our opportunities and our challenges and our strategic direction. We all feel very optimistic about the future of the company.” 

If Peltz doesn’t get what he wants, he can nominate directors to be put up for a shareholder vote at Disney’s next annual meeting. The nomination window for new board members opens on Dec. 5 and runs until Jan. 4, according to Disney’s latest proxy statement. Peltz and Trian are not asking Disney to give Perlmutter a seat on the board nor to rehire him, the individual familiar told TheWrap.

Disney beat Wall Street expectations for its fourth quarter of 2023 and announced an additional $2 billion in planned cost cuts. It also narrowed losses in its direct to consumer division by 70% year over year to $420 million. As of the end of the fourth quarter, Disney+ reported a total of 150.2 million subscribers, while Hulu and ESPN reported 48.5 million and 26 million subscribers, respectively.

The company is currently on the hunt for strategic partners for ESPN that could help with content or distribution for a direct-to-consumer version of the sports network that is targeting a 2025 launch. It also continues to evaluate strategic options for its linear networks, which Iger said “may not be core” to the company back in July.

Disney shares are currently trading at $93.84 apiece, up 5.4% year to date but down 1.75% in the past year.

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