Disney CEO Bob Iger reveals the company has made a deal with the San Fransisco-based investment firm ValueAct Capital Management.
The investment deal comes at a troublesome time for Disney, whose stock value has lost billions in just over a year.
ValueAct Become Large Disney Investors
According to reports, ValueAct has invested significant capital in Disney, yet the full amount is undisclosed.
ValueAct representatives went on the record during their 2024 meeting, where they agreed to do all they could to support Bog Iger and the Disney board as they try to revive the media empire.
Confidentiality Agreement With ValueAct
Disney revealed they have signed a rare agreement with their new activist investors.
As per the agreement, ValueAct will be allowed to consult on strategic matters, meet with board executives and directors, and even receive information about the company.
Iger Confident With the Deal
Bob Iger recently spoke about the deal in a press conference, claiming that he is very hopeful the partnership with ValueAct can revitalize the company.
“ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its Co-CEO Mason Morfit has been very constructive in the conversations we’ve had over the past year. We welcome their input as long-term shareholders,” said Iger.
Last Ditch Attempt
Bob Iger’s deal with ValueAct is a last-ditch attempt to hold off the critics who are upset with Disney following a poor financial year.
Disney is also stuck in the midst of a proxy war with some of its largest investors, including Trian Fund Management, owned by Nelson Peltz, and the former executive of the company Issac Perlmutter. Between them, they own over 44 million Disney shares.
ValueAct Invests Only Invest in the Best
ValueAct Capital was co-founded by the American businessman Jeffery Williams Ubben. He currently sits as the chairman of the hedge fund.
Since its founding in the mid-2000s, ValueAct has invested in some of the largest growing companies of modern history, including 21st Century Fox, Microsoft, New York Times, Adobe, and Nintendo.
Disneys Recent Downfall
Disney has been under fire during recent years as its stock price continues to plummet.
While some experts believe the recent “woke” identity lost them a large fan base, others surmise poor leadership skills and under-qualified executives and chairmen ultimately brought about the mess the company currently finds itself in.
Disney Cut 5,000 Employees
Last August, Disney’s share hit a nine-year low, forcing the company to look at various ways to cut the losses.
Pressure from shareholders forced Disney to reduce its workforce by around 5,000; in total, the company cut around $7.5 million in costs across the board.
Trian Continues to Fight for Seats
Trian Fund Management, one of Disney’s largest shareholders, claims the recent cuts are insufficient.
Under the command of Nelson Peltz, the investment firm is currently fighting to obtain two seats on Disney’s board. They are extremely unhappy with the recent drop in share price and argue that a board with more media experience is required to bring Dinsey back to its former greatness.
Blackwell Urges Trian to Take a Step Back
Another hedge fund firmly invested in Disney’s future is Blackwell Captial, which also plans to nominate three people to sit as directors on the media company’s board.
The investment firm recently took aim at Trian and Peltz. “We call on Mr. Peltz to end his peacocking so that Disney can focus on its bright future and not be dragged backward in time,” said Jason Aintabi, Blackwell’s chief investment officer.
Disney Can Lead the Industry Forward
Mason Morfit, co-CEO and chief investment officer for ValueAct, believes with the correct help, Disney could once again become a media industry pioneer.
“As legacy technologies transition to digital platforms, we believe Disney can lead the media industry forward. We could not be more excited to partner with Bob and the board to help create long-term sustainable shareholder value,” said Morfit.
Iger Goes Back on Plan to Sell Assets
Over a year ago, Iger claimed that Disney assets such as ABC, TV stations, and cable networks may be sold off as they don’t fit into Dinsey’s core plan.
However, he quickly went back on this idea following the announcement of Disney’s plan to combine streaming platforms Hulu and Disney Plus into one platform that aims to compete with Netflix.
