Activist investor Nelson Peltz has withdrawn his bid for a seat on the board of The Walt Disney Company after nearly one month of fighting.
The news comes a day after Disney announced its Q1 results and restructuring update, which sees the conglomerate cut nearly 7,000 jobs in a $5.5 bn cost-saving initiative.
Peltz runs multi-billion-dollar asset management firm Trian Fund Management. It collectively owns nearly 9.4 mn common shares in Disney, valued at roughly $1 bn.
In January, Peltz declared his intention to ‘restore the magic’ at Disney by acquiring a seat on the board, calling for a proxy vote due to be held on April 3. After the results released by Disney on February 8, however, he decided to withdraw.
While Disney reports an 8 percent increase in revenues for the quarter ended December 31, 2022, from $21.8 bn to $23.5 bn, it says the restructuring will result in a more ‘cost-effective, co-ordinated and streamlined company’.
In the initial proxy statement in January, Trian said it believes Peltz’s ‘significant expertise and long track record’ of working successfully with management teams and boards to turn around and improve company performance and drive sustainable long-term shareholder value will be ‘invaluable’ to Disney as it works to overcome its challenges.
‘Weather future disruptions’
Commenting on the decision to back down, Trian says it was glad it could help Disney focus on taking ‘decisive actions’ that led to better financial results.
Robert Iger, reappointed CEO at Disney, says: ‘We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders.’
Disney celebrates its centennial milestone in 2023. The $198 bn entertainment giant says it will continue to engage with all shareholders and looks forward to its annual meeting on April 3.
Disney is the latest large-cap company to take cost-saving measures in the form of job cuts, following Microsoft, Amazon and Meta, all of which slashed more than 10,000 jobs each in the past few months.