ValueAct, Blackwells seek to prop up Disney in battle with Trian

Separately, Blackwells said it would nominate three directors to Disney's board, who, unlike Trian, are supportive of the company's strategy, confirming an earlier Reuters report. "ValueAct 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 CEO Bob Iger said.

Two activist hedge funds, ValueAct Capital and Blackwells Capital, moved on Wednesday to provide backing to Walt Disney Co as it defends itself against a board challenge from a third activist investor, Trian Fund Management. The unusual twist in the battle for Disney's board underscores the high stakes in the company's attempted turnaround under CEO Bob Iger. He led Disney from 2005 to 2020 and returned to the helm in November 2022, after investors punished the company's stock for a $1.5-billion quarterly loss in its streaming division, more than double the year-ago loss, and many of its movie franchises underperformed.

Disney said on Wednesday it reached a deal with ValueAct to advise it on strategy and support its director nominees at its annual shareholder meeting. Separately, Blackwells said it would nominate three directors to Disney's board, who, unlike Trian, are supportive of the company's strategy, confirming an earlier Reuters report.

"ValueAct 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 CEO Bob Iger said. The company did not immediately comment on Blackwells' move.

Trian CEO Nelson Peltz has nominated himself and a former Disney Chief Financial Officer to Disney's board, positioning themselves as the people the media and entertainment giant needs now to cut costs, lay out a CEO succession plan and revamp the company's streaming operations. Trian did not immediately respond to a request for comment.

ValueAct has known the Disney team for more than a decade and has been in contact with management as it built its stake over the last months, sources told Reuters in November. It sees room for the company's stock price to roughly double, the sources had said.

The investment firm, which has long preferred to work with target companies out of the spotlight, has experience in the media sector having previously held a board seat at 21st Century Fox and supported the company when it sold its entertainment assets to Disney. A year ago, ValueAct's co-CEO Mason Morfit was invited onto the board of Salesforce and helped defuse a brewing fight between the business-software maker and a handful of activists who were threatening a proxy fight. ValueAct meanwhile has board seats at roughly half of all companies in its portfolio.

In an effort to blunt the board challenge, Disney already proactively refreshed its board in November when it named former Morgan Stanley CEO James Gorman and former SKY CEO Jeremy Darroch as directors.