Activist investor Nelson Peltz wants a seat Walt Disney Council, saying it wanted to “restore the magic” at the entertainment and media company.
Disney has lost its way in recent years, Peltz said in a Trian press release, “which has led to a rapid deterioration in its financial performance from a consistent dividend payout, high free cash flow to a highly leveraged organization with low earnings strength and poor free cash flow conversion.”
In a presentation accompanying the securities filing, Trian noted that Disney’s total shareholder returns have “materially underperformed” the S&P 500 and its proxy peers over one, three, five and 10 years.
“We believe current investor sentiment towards Disney is low, reflecting the harsh reality that Disney is a company in crisis and facing many challenges that weigh heavily on the company’s investment prospects,” the presentation said.
Disney shares have fallen by more than a third in a one-year period. The S&P 500 is down by half, just over 15%.
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“As a highly active shareholder serving on the Disney Board of Directors, my goal is to work collaboratively with Bob Iger and other directors to take decisive actions that will lead to improved operations and financial performance, enhanced shareholder value, and a robust succession planning process that will set the stage for long-term sustainable growth.”
Disney announced on Wednesday Mark Parkera member of the company’s board of directors for seven years and CEO of Nike, will become the new chairman of the board.
In the announcement, former board chairwoman Susan E.
“He is uniquely positioned to chair the Disney Board during this transitional period,” she added.
Trian and Disney connection
Currently, Trian owns approximately 9.4 million common shares in Disney, a company valued at approximately $900 million.
Despite Disney’s significant advantages, its recent share price and operating performance have been disappointing, Trian said Jan. 2. 11 release.
Shares of the entertainment giant are currently trading near an eight-year low, Trian said, despite the company’s recent decision to reappoint Bob Iger as CEO.
The investor noted that adjusted earnings per share have fallen 50% since fiscal 2018.
The dispute with Disney could be Peltz’s biggest proxy battle since a fierce battle for a seat on the board of Tide detergent maker P&G. During his more than three-year tenure on the P&G board of directors, the company’s share price rose nearly 80%.
Disney has also faced pressure from Third Point’s Daniel Loeb to divest the ESPN sports channel, update its board of directors and buy Comcast’s stake in Hulu, which has about 46 million subscribers.
Walt Disney did not immediately respond to inquiries from FOX Business.
Reuters contributed to this report.
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