Disney Proxy Battle Heats Up As Ancora Holdings Backs Nelson Peltz And Trian, Says Disney Engaged In “Sustained Value Destruction”

December 5, 2023 ·

John F. Trent

Nelson Peltz via CNBC

The pending proxy battle for board seats on The Walt Disney Company is heating up as Ancora Holdings Group threw their support behind Nelson Peltz and his Trian Fund Management.

Kaitlin P. and Sorcerer Mickey via Disney Parks YouTube

Back in January, Trian Fund Management nominated Peltz to the Disney board given it believed that The Walt Disney Company “is a company in crisis with many challenges weighing on investor sentiment.”

Specifically the firm detailed the company has poor corporate governance, poor strategy and operations, and poor capital allocation. The firm also noted it wanted to “refocus the creative engine to drive profitable growth.”

Peltz and Trian would eventually pull away from the proxy battle in February issuing the following statement, “We congratulate Disney and Bob Iger on their recently announced operating initiatives, which are a win for all shareholders and broadly align with our thinking. We are pleased with the role that Trian was able to play in helping to focus the Board to take decisive actions which we believe will lead to better financial results. We were also pleased to see the Company’s pledge to restore the dividend.”

Nelson Peltz via David Rubenstein YouTube

However, CNBC reported the proxy battle was back on in October and Trian had managed to increase its shares in Disney to more than 30 million. In January, Trian noted they only controlled 9.4 million common shares.

Not only did CNBC note the proxy battle was back on, but the outlet also detailed that the stakes were higher now. “The firm plans to push for multiple seats on the board this time, including one for Peltz,” anonymous sources told CNBC.

By the end of October it was revealed that former Marvel executive Ike Perlmutter had aligned himself with Peltz. The Wall Street Journal’s Laurent Thomas and Robbie Whelan reported, “Perlmutter said he has entrusted his stake in Disney to Peltz’s Trian Fund Management as it prepares to press the company for multiple board seats. Trian’s holding in the company totals about 33 million shares, including stock that the investment firm controls under an arrangement that gives Peltz’s firm sole voting power over Perlmutter’s shares, according to people familiar with the matter.”

Their report also detailed that Perlmutter plans to urge the Disney board to “immediately welcome one or more Trian candidates.”

Perlmutter stated, “While I was a Disney employee, I was not comfortable publicly stating my views on the company and its performance. As someone with a large economic interest in Disney’s success, I can no longer watch the business underachieve its great potential.”

Robert Downey Jr. as Iron Man (2008), Marvel Entertainment

Ancora Holdings Group, which manages $8.7 billion in assets, announced their involvement in the proxy battle earlier today in a press release noting, “The addition of a shareholder representative or investor-designated directors to the Board can help ensure that these efforts are carried out in the most effective way. In an effort to avert an election contest following a year of distractions and disappointing performance, we hope you join us in encouraging the Board to pursue a viable compromise with Trian Fund Management, L.P. and Nelson Peltz.”

The group also called out Bob Iger and The Walt Disney Company’s mismanagement, “A degree of shareholder-driven change is certainly warranted in Disney’s boardroom following an extended period of absentminded governance, ineffective succession planning, polarizing actions and sustained value destruction.”

It did not stop there. Ancora lampooned the current board and current executives, “Many of Disney’s current directors and executives bear responsibility for lapses that have undermined the Company’s positioning in the exceedingly competitive and ever-changing entertainment world. While it has been argued that challenges largely stem from the tenure of Bob Chapek, the Board was in the driver’s seat before, during and after that time.”

To that point, Ancora added, “The Board’s stewardship issues have not only resulted in financial setbacks. By allowing Disney to devote shareholders’ resources to a number of politicized initiatives, the Board has overseen a deterioration of what was once the most unifying brand in the world. The Company is increasingly dividing – rather than delighting – a growing number of consumers.”

HOLLYWOOD, CALIFORNIA – APRIL 27: (L-R) The Walt Disney Company Chief Executive Officer Bob Iger and Chris Pratt attend the Guardians of the Galaxy Vol. 3 World Premiere at the Dolby Theatre in Hollywood, California on April 27, 2023. (Photo by Charley Gallay/Getty Images for Disney)

Ancora would also put on blast Jason Aintabi the principal of Blackwells Capital LLC who has sided with Bob Iger in the proxy battle. The firm stated, “In closing, we want to address what looks to be a self-serving publicity stunt on the part of Blackwells Capital LLC. The firm’s principal, Jason Aintabi, recently attacked Mr. Peltz’s efforts at Disney hours before reportedly launching a campaign at The Wendy’s Company, where Mr. Peltz is Chairman and the largest shareholder. We believe the record shows Mr. Aintabi is a publicity-seeking greenmailer with a questionable personal and business history.”

“On the other hand, it is widely known that Mr. Peltz is a pioneer in shareholder activism, who has made billions of dollars over many decades for himself, his partners and fellow shareholders in the companies in which he has invested. Mr. Peltz (or a qualified designee) would make a fantastic addition to Disney’s Board,” Ancora concluded.

Robert Downey Jr. as Iron Man (2008), Marvel Entertainment

Aintabi and Blackwells Capital made it clear he opposed Peltz and supported Iger by issuing a statement at the end of November. Variety reported, Blackwells stated, “Displacing these individuals or other members of the board with Mr. Peltz and other Trian-selected nominees would deprive shareholders of valuable, experienced voices in the boardroom at a critical time in the company’s history.”

“Blackwells is concerned that Trian’s campaign prioritizes Mr. Peltz’s ego over what is best for all Disney shareholders, and that its latest effort may cost Disney shareholders upwards of $50 million and serve only as a value destructive fog for Disney’s leadership and board,” the group concluded.

Aintabi, for his part, added, “Mindless, drum-beating activism is not the right strategy for shareholders. Disney’s board is acting in the best interests of all shareholders and should be allowed the time to focus on driving value at one of America’s most iconic companies without this fatuous sideshow.”

A scene from Doctor Who 60th Anniversary Special “The Star Beast”

Not only did Aintabi publicly rebuke Peltz and declare his allegiance to Iger and the current Disney board, but recent reports indicate he’s targeting Peltz at Wendy’s Co.

Reuters reports, “Activist hedge fund Blackwells Capital is preparing to challenge Wendy’s Co’s board of directors in a push for improvements to the fast food chain’s financial performance.”

Peltz’s Trian Management owns a 16% stake in Wendy’s and has three representatives on the board including Peltz, Trian President Peter May and Peltz’s son and Trian research co-head Matthew Peltz.