Nelson Peltz might have scored $300 million after losing the Disney proxy war. But it was still a waste of time, expert says

Nelson Peltz might have scored 0 million after losing the Disney proxy war. But it was still a waste of time, expert says
Pls share this post

Listen to this article
Nelson Peltz
  • Activist investor Nelson Peltz lost a long proxy war against Disney CEO Bob Iger.
  • The Wall Street Journal reported that Peltz’s hedge fund made around $300 million in profits from the battle.
  • Still, Peltz’s time could’ve been spent on other campaigns rather than activism.

The proxy war between Disney and billionaire activist investor Nelson Peltz is over.

Disney CEO Bob Iger gets to maintain control of the board, the company, as Iger says, can now focus on making better content, and Peltz … becomes $300 million richer?

According to The Wall Street Journal, Peltz’s hedge fund Trian Partners may have profited about $300 million by waging a 16-month proxy battle against Disney, citing anonymous sources familiar with the matter.

Most of that new wealth is on paper, according to the report.

READ ALSO  Bob Iger reveals when Disney's password-sharing crackdown will go into full effect

Last February, Bloomberg reported that Peltz made about $154 million in paper profit after buying 9.4 million shares of Disney. Around that time, Disney’s stock experienced a surge after Iger announced a restructuring plan that would cut 7,000 employees and save the company about $5.5 billion. Trian then backed off on its first proxy battle that it waged against Disney.

Now, The Journal reported that Peltz’s firm is expected to have made a total of around $300 million — a 40% return on its investment — after accounting for the $25 million Trian is estimated to have spent on the proxy war.

So even though Peltz lost the long proxy fight against Disney and won’t gain the two new board seats he was hoping for, is this a win-win scenario for the activist investor?

READ ALSO  Macron has taken a radical gamble that could backfire

Peltz appears to be spinning it that way based on the comment he made after the shareholders’ decision on Wednesday.

“Since we reengaged with the company last October, Disney’s stock is up about 50% and is the Dow’s best performer here to date,” he said.

But as The Journal noted, Trian’s $300-million consolation prize isn’t large compared to the firm’s vast assets worth $10 billion under management.

James Park, a corporate law expert from the University of California, Los Angeles, told Business Insider that it’s clear that Peltz would have preferred to win the seats he was seeking, given the amount of time and energy he spent on his activism. After all, Peltz waged two separate proxy battles against Disney in less than two years.

“That effort could have been spent on other investments or campaigns,” Park said. “There are easier ways to make money than activism and so Peltz must be disappointed by the outcome.”

READ ALSO  5 high-profile political figures who made a splashy transition to the media industry

When asked about the outcome of Peltz’s proxy war, IAC chairman and billionaire Barry Diller told CNBC’s Squawk Box on Thursday that the battle was a “grand waste of time” and questioned the value of Petlz’s activist campaign.

“It is a lot of Sound and Fury signifying nothing,” he said.

A spokesperson for Trian Partners did not respond to a request for comment.

Read the original article on Business Insider


Pls share this post
Previous article
Rebel Wilson claims agency ‘liked me fat’ after salary jumped from $3,500 to $10M
Next articleBillionaire, 87, avoids jail over insider trading scheme