Key Takeaways:
- Nelson Peltz’s hedge fund, Trian Partners, is waging a $25 million war for Disney board seats.
- Trian was once the “most feared” activist hedge fund, but its power may be waning, The Journal reported.
- If the bid for control at Disney fails, the outlet noted it might be Trian’s last major proxy fight.
As Trian Partners, led by Nelson Peltz, engages in a multimillion-dollar proxy battle for two Disney board seats, questions loom over whether this represents the 81-year-old activist investor’s final major confrontation, according to The Wall Street Journal.
Trian, once considered among the most formidable activist hedge funds, made waves with successful interventions at companies like Pepsi, Heinz, and Procter & Gamble. However, recent years have seen challenges, including investor withdrawals exceeding a billion dollars, partly attributed to a poorly timed investment in GE in 2015.
Reports indicate that major institutional investors, including The California State Teachers’ Retirement System and The New York State Common Retirement Fund, have signaled intentions to withdraw funds from Trian’s management, reflecting concerns over its performance. Trian’s assets have declined from about $12.5 billion in 2015 to approximately $10 billion, with a shift towards investments from Asia and the Middle East.
With Peltz’s sons, Matt and Diesel, taking on more active roles within the firm and its performance under scrutiny, industry insiders speculate whether the Disney battle marks a turning point for Trian.
The Wall Street Journal conducted interviews with approximately two dozen individuals familiar with Trian’s leadership and internal operations. However, the sources questioning the firm’s future were not named by the outlet. Trian representatives did not provide immediate responses to requests for comments from Business Insider.
Trian has allocated around $25 million for its campaign to secure two Disney board seats in the upcoming April 3 election. Holding a 1.8% stake in Disney, equivalent to roughly 32.3 million shares valued at $3.6 billion, the hedge fund faces competition from Blackwells Capital, which owns approximately $15 million worth of Disney shares and is also vying for board seats.
In a letter to Disney shareholders, Trian criticized the company’s management, citing a decade of underperformance in the stock market attributed to what it perceives as poor choices and failed strategies. Disney’s CEO, Bob Iger, who served for 15 years before his contract expired in 2020, returned to the role in 2022 following the dismissal of his successor, Bob Chapek.
While Disney flourished under Iger’s leadership, Bloomberg reported the company’s current condition as “worse than anticipated,” with efforts to recover its share price facing challenges over the past two years.
In response to Trian’s claims, Disney defended its stock performance in an investor presentation titled “Correcting Trian’s Fiction with Facts.” However, a spokesperson for Disney declined to address additional inquiries from Business Insider, instead referring to a recent statement from Iger to investors.
In his statement, Iger defended Disney’s recent performance, expressed enthusiasm for his return to the company, and emphasized plans to consistently deliver shareholder value. He urged shareholders to support the Disney board’s recommended nominees and refrain from voting for candidates proposed by activist hedge funds like Trian and Blackwells.