Billionaire activist investor Nelson Peltz on Thursday ended his proxy fight with Walt Disney Co. after Chief Executive Bob Iger announced details of a major restructuring and cost-cutting program, including 7,000 job cuts.
“Now Disney plans to do everything we wanted them to do,” Peltz told Jim Cramer on CNBC. “We wish the very best to Bob, this management team and the board. We will be watching. We will be rooting.”
“The proxy fight is over,” Peltz said.
Peltz had been lobbying Disney executives and board members since July in an effort to join the company’s board of directors. He began to wage the proxy fight last month after being rebuffed by the company.
His hedge fund, Trian Fund Management, has amassed 9.4 million shares worth roughly $900 million. Trian sent letters to Disney stockholders asking them to vote for Peltz (or his son Matthew) to join the board and to not vote for current board member Michael Froman, a former U.S. trade representative.
Peltz sharply criticized the company, alleging poor succession planning and “self-inflicted” wounds such as the $71.3-billion acquisition of 21st Century Fox.
Peltz’s lobbying began when Bob Chapek (Iger’s handpicked successor) was still running the company. Chapek was fired abruptly in November, and the board brought Iger in to replace him.
Iger’s restructuring and cost-cutting program is meant in large part to get the company back on track to make its popular streaming service profitable. The streaming strategy, which Iger spearheaded, has won over customers but is bleeding cash. The company on Wednesday said its direct-to-consumer business — which includes Disney+, Hulu and ESPN+ — lost more than $1 billion during the most recent quarter.
Disney is targeting $5.5 billion in cost savings, largely from its content and marketing. Disney said it plans to achieve $3 billion in content savings over the next few years.
Disney’s financial results beat Wall Street estimates. It posted sales of $23.5 billion, up 8% from the same quarter last year. Analysts on average had been expecting $23.4 billion in revenue. Profit rose 11% to $1.28 billion. Disney’s earnings of 99 cents a share exceeded projections of 78 cents.
The stock increased 2% to $114.54 in midday trading.
