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Walt Disney has won the backing of investor ValueAct Capital as the entertainment company prepares for a battle with activist Nelson Peltz over how it can boost profits and boost its stock price.
San Francisco-based ValueAct, an activist known for taking a more collaborative approach to its goals, built a stake in Disney last year as the entertainment company struggled with its loss-making streaming business.
Disney said Wednesday that it had entered into an “information sharing agreement” with ValueAct and would consult with the investment firm on “strategic matters.” ValueAct will support Disney board candidates for election at this year's annual meeting, the company added.
The shareholder meeting, usually held in March or early April, is expected to be a tough day after Peltz's Trian Partners announced it would nominate two candidates to Disney's board.
Trian controls a roughly $3 billion stake in Disney and has been at odds with the group over the past year. He accused the board of being too close to CEO Bob Iger, who returned to lead the company in late 2022.
Disney has been under pressure from investors to curb wasteful spending during the streaming boom as Wall Street has shifted its focus to profitability.
“ValueAct Capital has a long history of collaboration and collaboration with the companies in which it invests, and its co-CEO Mason Morfit has been very constructive in the discussions we have had over the past year,” Iger said Wednesday.
ValueAct's less fearsome approach has helped win favor from previous targets. Salesforce, which faced an onslaught of activist investors including Elliott Management a year ago, gave Morfit a seat on its board.
Morfit described Disney as “the world's leading entertainment company,” adding that it has “the best intellectual property, sports brand, and parks and experiences in the industry.” ValueAct did not disclose the size of its stake.
News of Disney's deal with ValueAct came as smaller New York-based activist Blackwells Capital, which owns a $5 million stake in Disney, said it would propose its own slate of candidates at the shareholder meeting.
The company, which previously targeted fitness company Peloton, said it plans to nominate Warner Brothers Discovery chief executive Jessica Schell, Tribeca Film Festival co-founder Craig Hatkoff and Leah Solivan, a venture capitalist who founded TaskRabbit .
In December, Trian said it planned to propose Peltz and former Disney executive Jay Rasulo as directors. The move was Peltz's second attempt to force change at Disney, after he abandoned an earlier attempt to allow Iger to implement changes at the company.
Trian's decision followed Disney's appointment of outgoing Morgan Stanley chairman and CEO James Gorman and former Sky group CEO Sir Jeremy Darroch as board members in November.