Disney Gains Support From ValueAct Capital as Nelson Peltz Challenges Board

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The Walt Disney Company said on Wednesday that it had gained the backing of ValueAct Capital, a prominent activist hedge fund, as it faces a board challenge from the billionaire financier Nelson Peltz.

The news underscores how many activist investors are buying into Disney’s stock as the media giant faces numerous business challenges, including a stagnant stock price; concerns about its strategies for streaming, television networks and movie productions; and questions about its succession planning.

Beyond Mr. Peltz, who is seeking two board seats, and ValueAct, other hedge funds pursuing change at Disney include Blackwells Capital, a hedge fund that announced on Wednesday that it was seeking three seats on the company’s board.

In a statement, Disney said that ValueAct would support the company’s director nominees at its annual shareholder meeting. In exchange, the company will enter into an agreement to consult with the $16 billion hedge fund, including through meetings with the board.

“ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in,” Robert A. Iger, Disney’s chief executive, said. “We welcome their input as long-term shareholders.”

Mason Morfit, ValueAct’s co-chief executive, added: “As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward. We could not be more excited to partner with Bob and the board to help create long-term sustainable shareholder value.”

The agreement is the latest move by Disney to appease restive investors. In November, it added two new directors: James P. Gorman, the executive chairman of Morgan Stanley, and Jeremy Darroch, the former chief executive of the British broadcaster Sky.

ValueAct’s stake in Disney is believed to be substantially smaller than the 33 million shares that Mr. Peltz controls. But the firm is highly regarded on Wall Street as a constructive collaborator with corporate boards. Reaching a settlement with the firm removes a potential headache for Disney.

It is unclear what it would take to broker peace with Mr. Peltz, who has become partners with Ike Perlmutter, the irascible former chairman of Marvel Entertainment, and Jay Rasulo, a former chief financial officer of Disney who left after being passed over as Mr. Iger’s heir apparent. Mr. Peltz has pushed for cost cuts, a revamped streaming strategy and a clearer succession plan.

But while some shareholders have backed Mr. Peltz’s efforts, including the hedge fund Ancora Holdings, others appear unswayed. Among them is Blackwells, which said its three board nominees would back Mr. Iger and called on Mr. Peltz “to end his peacocking so that Disney can focus on its bright future, and not be dragged backward in time.”

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