Nelson Peltz does not understand our business, ‘lacks skills’ to assist board

Disney (DIS) has hit back at activist investor Nelson Peltz amid its ongoing proxy battle with the hedge fund billionaire. “Nelson Peltz does not understand Disney’s businesses and lacks the skills and experience to assist the board in delivering shareholder value in a rapidly shifting media ecosystem,” Disney said in […]

Disney (DIS) has hit back at activist investor Nelson Peltz amid its ongoing proxy battle with the hedge fund billionaire.

“Nelson Peltz does not understand Disney’s businesses and lacks the skills and experience to assist the board in delivering shareholder value in a rapidly shifting media ecosystem,” Disney said in an updated proxy statement on Tuesday, adding: “The current Disney board is the right board for shareholders.”

The company once again defended its stock performance under CEO Bob Iger’s watch, noting during his first bout as chief executive Disney’s total shareholder return totaled 554%, topping the 244% total return realized by the S&P 500 over that period.

Additionally, amid Peltz’s repeated criticism of the company’s $71.3 billion purchase of 20th Century Fox in 2019, Disney doubled down on its Iger-era acquisitions, which also included Marvel in 2009 and Lucasfilm in 2012.

The company argued the deals “transformed” the business into the media powerhouse it is today after Peltz told CNBC in a recent interview: “Fox hurt this company. Fox took the dividend away. Fox turned what was once a pristine balance sheet into a mess.”

Disney shares, which were little-changed in early trading on Tuesday, are up about 4.5% since Peltz first announced his proxy battle on January 11.

At the time of that announcement, Disney revealed Nike executive chairman Mike Parker would take over Susan Arnold’s position as chairman of the board and also recommended shareholders vote against Peltz in his efforts to win a seat on the company’s board.

Peltz’s Trian Fund Management said it owns approximately 9.4 million shares of Disney’s stock, which equates to roughly $900 million. The hedge fund, which disapproved of Iger’s surprise return, is pushing for additional cost cuts, operational adjustments, and a post-Iger successor — something the company wants as well.

“Trian believes that Disney’s recent performance reflects the hard truth that it is a company in crisis with many challenges weighing on investor sentiment,” the hedge fund said in a statement last week.

“While we acknowledge that Disney, like many media companies, is undergoing a challenging pivot to streaming, Disney also benefits from owning best-in-class intellectual property, a more diversified business mix, and a Parks business that is enjoying all-time high profitability. As such, we believe that the Company’s current problems are primarily self-inflicted and need to be addressed immediately.”

Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California October 25, 2016. The activist investor is currently engaged in a proxy battle with Disney.

Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California October 25, 2016. The activist investor is currently engaged in a proxy battle with Disney.

Disney faced a rough 2022 as shares slid about 45%, marking the worst annual stock performance for the company since 1974.

Streaming profitability, the future of Hulu, and a possible ESPN spin-off all hang in the balance as Iger continues to navigate a bruised business beset with leadership challenges, unfavorable price increases, and a direct-to-consumer division struggling to turn a profit.

Alexandra is a Senior Entertainment and Media Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at [email protected]

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