Disney’s largest shareholder, index-fund manager Vanguard, plans to support management over Nelson Peltz’s Trian Partners in Wednesday’s board vote, Bloomberg News reported Tuesday, citing unnamed people familiar with the matter.
This news comes as a significant blow to Peltz’s ambitions to join Disney’s board. If both Vanguard and Blackrock, Disney’s second-largest shareholder, continue to back the media company’s candidates, Peltz will only have the support of State Street and Geode Capital Management, the company’s third- and fourth-largest shareholders respectively.
Vanguard owns 7.8% of Disney shares, while Blackrock holds 4.2% of shares. With these two major shareholders supporting the incumbent board and CEO Bob Iger, it appears that Peltz’s chances of gaining a seat on the board are diminishing.
Trian Partners, which controls 1.8% of Disney shares, is the fifth largest shareholder due to an arrangement with former Marvel Chairman Ike Perlmutter. However, smaller shareholders such as Neuberger Berman and CalPERS have shown support for Trian.
In response to Trian’s bid for a board seat, Disney has called in some heavyweights from the corporate and media world. JPMorgan Chase CEO Jamie Dimon and Star Wars creator George Lucas have been enlisted to support Disney’s management.
Disney’s shareholder meeting is scheduled to begin on Wednesday at 1 p.m. ET. Institutional shareholders have until Wednesday to change their vote, while retail investors have until 11:59 p.m. ET Tuesday to submit their vote by phone or online.
Vanguard declined to comment on the matter when approached by CNBC.
This board dispute between Disney and Nelson Peltz’s Trian Partners has garnered significant attention in the media and among investors. As one of the world’s largest media conglomerates, Disney’s management decisions have far-reaching implications. The outcome of this board vote will shape the future direction of the company and could potentially impact its stock performance.
It is not surprising that Vanguard, an index-fund manager, would support management in this dispute. Index funds typically aim to replicate the performance of a specific market index, such as the S&P 500. By supporting management, Vanguard is likely prioritizing stability and continuity, which aligns with their investment strategy.
On the other hand, Trian Partners represents a more activist approach to investing. They seek to actively influence the companies they invest in and drive operational and strategic changes. Peltz’s bid for a board seat at Disney is in line with Trian’s overall investment philosophy.
It remains to be seen how this board vote will ultimately play out. The support of Vanguard and Blackrock, two major shareholders, significantly strengthens management’s position. However, Trian still has the backing of smaller shareholders and has made a compelling case for change within Disney’s board.
Investors will be closely watching the outcome of this dispute and its impact on Disney’s future. Regardless of the result, it is clear that both management and activist investors are actively vying for control and influence over the company’s direction. The decisions made in the boardroom will shape Disney’s trajectory in the ever-evolving media landscape.
