5paisa Research Team
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5paisa Research Team
14th Oct 2024
Disney Makes Progress in Fight for Board Seats Against Activist Investors
Tanushree Jaiswal
Last Updated: 2nd April 2024 - 03:32 pm
In the race for board seats and the future of the international entertainment behemoth, Walt Disney (DIS.N) opened a new tab that seemed to be winning out over activist investors. Before the company's annual meeting on Wednesday, 3rd April 2024, more than half of all shares were voted.
T. Rowe, which has about 11.7 million Disney shares, or 0.64%, supported the business. He also declared that he had cast votes to re-elect Michael Froman and Maria Elena Lagomasino, the two Disney directors whom Nelson Peltz's Trian Fund Management is challenging.
Disney also secured the support of its second-largest stakeholder and an influential investor, BlackRock. However, BlackRock declined to comment on this matter. Although this may give Disney an edge, people reviewing the votes believe things may change after the final voting on Tuesday.
It is because people who have already voted still have the chance to change their minds and decisions. Investors Trian and Blackwells Capital and Disney executives in high places made their last effort to persuade voters to support their board candidates.
The battle and the stakes are very high. Disney wants all 12 current directors to be re-elected. However, Trian and Blackwells Capital want them to win the votes. This voting is crucial as Disney is trying to reimage its branding, make its OTT platform profitable, and search for partners to build the future of ESPN.
Even though Disney's stock prices saw a jump of 34% in 2024, they are still close to 40%, down from the record highest in March 2021. Trian, the billionaire, is looking for two seats in Disney - one for himself and another for Jay Rasulo, the former Disney Chief Financial Officer.
According to Trian, two directors - Lagomasino and Froman, lack relevant skills. Before the voting, he even shared materials with the investors on Monday, 1st April 2024. On the other hand, Blackwells Capital is telling investors to vote for anyone other than Trian. They are looking for three seats in Disney.
Blackwells Capital is also asking Disney to explore the AI field and consider splitting hotel assets and theme parks into a real estate investment trust. At the same time, the current Disney board members are reaching out to investors and asking them to consider and vote for them.
Disney has not replied to any comments in all this hustle and bustle. As a source with first-hand knowledge of the voting system said on Monday, "Each side has hundreds of people making phone calls to investors who have either already voted, and we want to change their vote, or they haven't voted at all, and we want to bring them on board."
One of Disney’s board members, Carolyn Everson, stated that the company failed to do effective succession planning. She said in an interview with CNBC that it is the number 1 job of the board to examine internal candidates, and they take this up very seriously.
The annual meeting of Disney is scheduled for 1 PM EST on 3rd April 2024 and will be held virtually.
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