Nelson Peltz cashed out his Disney stake after losing his proxy fight

In the end, veteran investor Nelson Peltz came away with a big win in his battle with the Walt Disney Co.

Peltz’s Trian Fund Management sold its Disney shares after Peltz lost his hard-fought campaign to join the Burbank entertainment giant’s board of directors and exert influence over the Magic Kingdom.

Last month, Disney shareholders rejected the billionaire’s proxy bid, but Trian still profited by selling its Disney stake to reap about $1 billion on its investment, according to business news network CNBC, which quoted an unnamed person familiar with the matter.

Trian reportedly capitalized on Disney’s recent run-up in stock price, when shares traded at about $120 in early April.

Since then, Disney’s stock has fallen. Shares were hovering around $101 on Thursday.

Still, Disney is up 12% since the beginning of the year as Chief Executive Bob Iger seeks to demonstrate that he’s properly managing the company to achieve success in the streaming era.

While Disney strenuously campaigned against Peltz and his ally, former Disney executive Jay Rasulo, the company has heeded some of Peltz’s calls, including implementing rounds of rigorous cost-cutting, resulting in about 8,000 positions being eliminated.

Representatives of Trian and Disney declined to comment.

In what became Disney’s most consequential board election in 20 years, Peltz repeatedly hammered the company for its missteps and bungled succession efforts.

Peltz’s proxy campaign zoomed in on Disney’s subpar stock performance over the last five years, uneven box-office results and $71-billion purchase of much of Rupert Murdoch’s 21st Century Fox, which provided Disney with more library content and intellectual property, including “Avatar,” “The Simpsons,” and “Deadpool.” Peltz and some analysts viewed the Murdoch deal as a costly mistake.

Another sore point was Disney board members’ decision to hire Bob Chapek as CEO four years ago and extending Chapek’s contract less than six months before directors forced him out. Chapek, who was Iger’s handpicked replacement, made several costly blunders, including allowing Disney to become fodder for the culture war campaign of Florida Gov. Ron DeSantis.

Disney also racked up billions of dollars in losses on streaming.

Peltz unveiled Trian’s proxy fight last fall. It was his second stab at winning a board seat, but the activist investor withdrew his initial effort in early 2023 after Iger first announced his cost-cutting plans. Last fall, Peltz reportedly added to his Disney stake. In October, the stock was trading below $90 a share.

Peltz mustered the votes of about 30% of shareholders who voted in April’s election, according to a Securities and Exchange filing.

Iger received 94% of shareholders’ support — a clear victory that reinforced his popularity among large institutional investors as well as small shareholders who are nostalgic for the company, its characters and theme parks. Three-quarters of “retail” shareholders (as opposed to larger institutional investors, such as mutual funds) voted in support of Disney’s slate of 12 board nominees, which included Iger.

Despite their proxy battle victory, Iger and his management team remain under pressure to accelerate the company’s turnaround plans, including efforts to make its streaming business profitable. Disney must preserve the power of its ESPN sports empire, and other TV channels, while also reinvigorating its movie pipeline and expanding its theme parks and resorts business.

Disney has announced a $60-billion investment in theme parks, resorts and cruise lines over the next decade. In April, the Anaheim City Council approved a $1.9-billion expansion plan for the sprawling Disneyland Resort.

Disney board members must also find a capable successor for Iger — a duty that has eluded the company for years. Iger’s current contract runs through 2026.

Staff writer Samantha Masunaga contributed to this report.