Disney says Peltz ‘lacks the skills’ to help businesses as proxy fight heats up

Jan 17 (Reuters) – Walt Disney Co (DIS.N) on Tuesday defended its decision to reject Nelson Peltz’s board seat, saying activist investors “lack the skills and experience” to help the media and entertainment giant .

In a letter to shareholders, the House of Mickey Mouse also highlighted the company’s success under the leadership of CEO Bob Iger, who recently returned from retirement to lead the company for a second time.

“Peltz does not understand Disney’s business and lacks the skills and experience to assist the board in creating value for shareholders in a rapidly changing media ecosystem,” Disney said.

The billionaire formally launched a bid for a board seat last week to rescue the company from what he called a “crisis” of overspending on its streaming business, its acquisition of 21st Century Fox and a failed succession plan.

Peltz has an internal advocate, Marvel Entertainment Chairman Isaac “Ike” Perlmutter, who has called for the activist investor to be removed six times, according to a Disney shareholder letter also filed with regulators. Join the Disney Board of Directors. Perlmutter has been pressing the issue since July 2022, reaching out to former CEO Bob Chapek, director Safra Catz and other executives on Peltz’s behalf.

The activist’s move is seen as a serious challenge to Iger and pits one of Hollywood’s most popular executives against an activist investor known for his work at consumer products companies.

Peltz told CNBC last week that Disney should buy the remaining shares of Hulu it doesn’t already own or exit the streaming business. Disney has reached a deal to buy Comcast Inc’s (CMCSA.O) one-third interest in the Hulu streaming service as early as January 2024.

Disney also needs to increase capital spending in its parks business, which he said at the time could raise ticket prices “too much.”

In a statement Tuesday, Disney said it was already working to improve the profitability of the Disney+ streaming business Iger helped launch in 2019 and was rolling out broader cost-cutting measures.

Disney also defended its $71 billion acquisition of Fox’s entertainment business, which added valuable film assets such as “Avatar” and the feature-length animated series “The Simpsons,” a film that underpinned the launch of Disney+ in 2019. popular programs. It also brought a slew of seasoned executives to Disney, including Dana Walden, its chairman of general entertainment content.

Peltz’s Trian Fund Management, which owns 0.5 percent of Disney, or about $900 million, declined to comment.

Unless Peltz reaches a settlement with Disney, investors will vote this year on whether he should sit on the company’s board. Last year, the annual general meeting was held on March 9.

Reporting by Dawn Chmielewski in Los Angeles and Eva Mathews and Aditya Soni in Bengaluru Editing by Shinjini Ganguli and Matthew Lewis

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