Nelson Peltz cashes in the Disney bet after losing a proxy fight

Ultimately, veteran investor Nelson Peltz came away with a big victory in his battle with Walt Disney Co.

Peltz's Trian Fund Management sold its Disney shares after Peltz lost his hard-fought campaign to join the Burbank entertainment giant's board of directors and gain influence over the Magic Kingdom.

Last month, Disney shareholders rejected the billionaire's proxy offer, but Trian still profited by selling his stake in Disney to raise about $1 billion on his investment, according to the business news network. CNBCwhich quoted an unnamed person familiar with the matter.

Trian reportedly benefited from the recent rise in Disney's stock price, when its shares traded for around $120 in early April.

Since then, Disney shares have fallen. Shares were hovering around $101 on Thursday.

Still, Disney is up 12% year-to-date as CEO Bob Iger tries to show he's running the company the right way to achieve success in the streaming era.

While Disney has campaigned vigorously against Peltz and his ally, former Disney CEO Jay Rasulo, the company has heeded some of Peltz's calls, including implementing rounds of rigorous cost cutting that eliminated about 8,000 positions.

Representatives for Trian and Disney declined to comment.

In what would become Disney's most consequential board election in two decades, Peltz repeatedly criticized the company for its missteps and failed succession efforts.

Peltz's proxy campaign zeroed in on Disney's underperforming stock performance over the past five years, uneven box-office results, and its $71 billion purchase of much of Rupert Murdoch's 21st Century Fox, which gave Disney more library content and intellectual property, including 'Avatar, 'The Simpsons' and 'Deadpool'. Peltz and some analysts viewed the Murdoch deal as a costly mistake.

Another sore point was Disney board members' decision to hire Bob Chapek as CEO four years ago and extend Chapek's contract less than six months before directors forced him out. Chapek, Iger's hand-picked replacement, made several costly blunders, including allowing Disney to become fodder for Florida Governor Ron DeSantis' culture war campaign.

Disney also suffered billions of dollars in streaming losses.

Peltz revealed Trian's proxy fight last fall. It was his second attempt to win a seat on the board of directors, but the activist investor withdrew his initial efforts in early 2023 after Iger first announced his cost-cutting plans. Last fall, Peltz reportedly increased his stake in Disney. In October, the stock was trading below $90 per share.

Peltz collected the votes of about 30% of shareholders who voted in the April election, according to a Securities and Exchange filing.

Iger received 94% of shareholder support – a clear win that cemented his popularity among both large institutional investors and small shareholders nostalgic for the company, its characters and theme parks. Three-quarters of retail shareholders (as opposed to larger institutional investors, such as mutual funds) voted in favor of Disney's list of twelve nominees for the board, including Iger.

Despite their victory in the proxy battle, Iger and his management team remain under pressure to accelerate the company's turnaround plans, including efforts to make its streaming business profitable. Disney must maintain the power of its ESPN sports empire and other TV channels while also reviving its movie pipeline and expanding its theme parks and resort operations.

Disney has announced a $60 billion investment in theme parks, resorts and cruise lines over the next decade. In April, the Anaheim City Council approved a $1.9 billion expansion plan for the sprawling Disneyland Resort.

Disney board members must also find a capable successor for Iger — a task that has eluded the company for years. Iger's current contract runs until 2026.

Staff writer Samantha Masunaga contributed to this report.

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