According to sources familiar with the situation, activist hedge fund Blackwells Capital would nominate three directors to Walt Disney Co. (DIS.N), competing with Trian Fund Management and seeking two seats on the entertainment giant’s board.
According to the sources, although board challenges often signify attempts to modify a company’s direction, Blackwells supports Disney CEO Bob Iger’s work.
According to the sources, Blackwells is providing a slate of nominations to Disney shareholders who believe that new blood on the board may benefit Iger but oppose choosing Trian’s nominees, who are critical of the company’s strategy.
The unexpected reversal in the campaign for Disney’s board of directors highlights the enormous stakes in the company’s planned recovery under Iger. He was CEO of Disney from 2005 to 2020. He will return in November 2022, after investors punished the company’s shares for a $1.5 billion quarterly loss in its streaming segment, more than double the previous year’s deficit, while several of its movie properties underperformed.
According to the sources, Blackwells will propose three executives with experience in entertainment, real estate, and venture capital to Disney’s board of directors.
According to the sources, these include Jessica Schell, a former Warner Brothers executive with expertise in content distribution; Craig Hatkoff, co-founder of the Tribeca Film Festival; and Leah Solivan, who created and led TaskRabbit.
According to the sources, Blackwell is also considering allowing incumbent board directors who lose their seats to Blackwell’s nominees to be restored through a board enlargement.
Because the nominations were private, the sources desired anonymity. Requests for comment from Disney and Trian were not immediately returned.
On Wednesday, Disney announced a partnership with another hedge fund, ValueAct Capital, to provide strategic advice and support for its board nominees at its annual shareholder meeting.
In November, Blackwells urged Trian to withdraw its board suit against Disney. Blackwells holds just approximately $5 million in Disney stock, but Trian controls $3 billion in Disney stock.
Trian’s CEO, Nelson Peltz, and former Disney Chief Financial Officer, James Rasulo, have been nominated. Another Disney investor, activist hedge fund Ancora Holdings, has endorsed it.
According to the sources, Blackwells has also requested that Disney probe Trian’s ties with Ancora and other stockholders.
In November, Disney took measures to revamp its board, hiring former Morgan Stanley (MS.N) CEO James Gorman and former SKY CEO Jeremy Darroch. Trian and other investors have chastised the board for botching Iger’s succession. As Disney’s issues increased, his hand-picked replacement, Bob Chapek, resigned in 2022, and Iger has since stated that he hopes he will have a new leader in place by 2026.
Following his return, Iger began a cost-cutting restructure. The business has informed investors that it is on track to save around $7.5 billion in costs, which is $2 billion higher than its original aim.
Jason Aintabi’s group, Blackwells, has previously been successful in ousting the CEOs of Peloton Interactive (PTON.O) and Colony Capital, which later became DigitalBridge. It also intends to challenge the Wendy’s Co. (WEN.O.) board, in which Trian has a 16% investment and three board representatives.
