Disney Enters Information-Sharing Deal with ValueAct Capital -- Update

By Dean Seal

Walt Disney has signed a confidentiality agreement allowing it to share company information with shareholder ValueAct Capital Management and consult with the firm on strategic matters.

The entertainment giant said Wednesday that the arrangement allows the activist investment firm, which has been building up a stake in Disney, to consult the company through meetings with the board and management.

"ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its co-CEO Mason Morfit has been very constructive in the conversations we've had over the past year," Disney Chief Executive Bob Iger said.

The investment firm has confirmed that it will support Disney's recommended slate of board member nominees at the company's upcoming annual shareholder meeting.

The arrangement comes as Disney fights off activist investor Nelson Peltz's Trian Fund Management, which has accumulated nearly 33 million Disney shares as it seeks multiple seats on the company's board.

Trian launched a proxy campaign toward the end of 2022 that called for cost cuts and board changes at Disney, but ended it in February after Iger said he would cut $5.5 billion in costs and reduce Disney's headcount by 7,000.

Concerned by Disney's performance during the summer that followed, Peltz is taking another run at the company with help from friend Isaac Perlmutter, former chairman of Marvel Entertainment, who has agreed to give Peltz's firm the voting rights to his large Disney stake.

Peltz said last month that he plans to nominate himself and former Disney Chief Financial Officer Jay Rasulo to the company's board.

The Wall Street Journal reported in November that ValueAct had taken a sizable but undisclosed stake in Disney to make it one of the San Francisco-based activist fund's largest holdings. ValueAct built up its position over the summer, while Hollywood was shut down by the writers' and actors' strikes and Disney's share price was languishing around $80, people familiar with the matter told the Journal.

Founded in 2000 by Jeffrey Ubben, ValueAct is known for working with management to avert potential proxy battles. Ubben stepped back from the company in 2017 and tapped his protégé, Morfit, to take the reins.

Disney and ValueAct said in their joint statement on Friday that ValueAct has navigated significant business transformations at Spotify, The New York Times, 21st Century Fox, Nintendo, Microsoft, Adobe and Salesforce.

"As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward," Morfit said. "We could not be more excited to partner with Bob and the board to help create long-term sustainable shareholder value."

Write to Dean Seal at [e-mail]

(END) Dow Jones Newswires

January 03, 2024 07:07 ET (12:07 GMT)

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