Disney says Peltz 'lacks skills' to help business as proxy battle heats ... - Reuters

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LOS ANGELES, Jan 17 (Reuters) - Walt Disney Co (DIS.N) connected Tuesday defended its determination to contradict Nelson Peltz a committee seat, saying the activistic capitalist "lacked the skills and experience" to assistance the media and amusement giant.

The location of Mickey Mouse successful a missive to shareholders besides underlined the company's successes nether Chief Executive Bob Iger, who precocious returned from status to pb the institution for a 2nd time.

"Peltz does not recognize Disney's businesses and lacks the skills and acquisition to assistance the committee successful delivering shareholder worth successful a rapidly shifting media ecosystem," Disney said.

The billionaire past week formally launched his bid for a committee spot to rescue the institution from what helium called a "crisis" of overspending connected the streaming business, the acquisition of 21st Century Fox and failed succession planning.

Peltz had an interior advocate, Marvel Entertainment Chairman Isaac "Ike" Perlmutter, who asked that the activistic capitalist beryllium added to Disney's committee connected a half-dozen occasions, according to Disney's preliminary proxy connection and accompanying materials filed with regulators. Perlmutter has been pressing the contented since July 2022, contacting erstwhile CEO Bob Chapek, manager Safra Catz and different elder executives connected behalf of Peltz.

Peltz's determination is seen arsenic a superior situation to Iger and pits 1 of the astir fashionable executives successful Hollywood against the activistic investor known for his enactment astatine user firms.

The billionaire capitalist told CNBC past week that Disney should bargain the remaining involvement successful Hulu it does not already ain oregon exit the streaming business. Disney has an statement to get Comcast Corp's (CMCSA.O) one-third involvement successful the Hulu streaming work arsenic soon arsenic January 2024.

Disney besides needs to boost superior expenditure astatine its parks business, wherever it astir apt raised summons prices "too hard," helium said then.

DISNEY HITS BACK

In its filing Tuesday, Disney said it was already moving to amended profitability astatine the Disney+ streaming concern that Iger helped motorboat successful 2019 and was rolling retired broader cost-cutting measures.

[1/2] Nelson Peltz founding spouse of Trian Fund Management LP. talk astatine the WSJD Live league successful Laguna Beach, California October 25, 2016. REUTERS/Mike Blake

The institution defended the acquisitions it made nether the since-returned CEO Iger, including for Pixar, Marvel and Lucasfilm. It said they were transformative and enhanced the company’s value.

As aboriginal arsenic July 11, 2022, Disney had been engaging successful conversations with Peltz, according to the preliminary proxy filed connected Tuesday with the U.S. Securities and Exchange Commission. The activistic expressed his enactment for then-CEO Chapek, and presented himself arsenic idiosyncratic who could beryllium adjuvant if helium joined the board.

Perlmutter, a Disney worker and shareholder, added his dependable to Peltz's run to articulation the board, arguing astatine 1 constituent that the activistic could assistance the embattled Chapek "solidify his presumption arsenic CEO." Without Peltz's help, the Marvel president warned, "former executives including Mr. Iger, would beryllium backmost astatine Disney."

As Peltz and Perlmutter continued to property their case, different activistic was pounding connected Disney's doorway - Daniel Loeb, main enforcement serviceman of Third Point. In August, Loeb contacted Chapek and Chief Financial Officer Christine McCarthy to accidental helium had invested successful Disney and recommended changes. He agreed to a standstill with the Sept. 23 assignment of an autarkic director, Carolyn Everson.

Meanwhile, Peltz's run for a committee spot intensified. He

notified Chapek connected Nov. 8 that helium had acquired $500 cardinal successful Disney stock, and planned to summation his involvement to $1 billion. Peltz said his Trian radical intended to nominate a merchantability of directors astatine the 2023 yearly gathering unless helium was named to the board.

The activistic continued to question a directorship adjacent aft the committee fired Chapek connected Nov. 20 and brought backmost Iger. In a video telephone 3 days later, Peltz rejected Iger and McCarthy's proposition that they find a mutually acceptable autarkic manager to service connected the board. Peltz said helium would judge lone the summation of himself to the board, according to Disney's account.

Disney's committee elected not to connection Peltz a seat, citing concerns astir "introducing further disruption to Disney's absorption squad 9 days into Mr. Iger's return."

On Jan. 11, Peltz took matters into his ain hands. His Trian Fund Management issued a quality merchandise announcing its nominee to the board, Peltz, mounting successful question the proxy battle.

Trian Fund Management, which owns a 0.5% stake, oregon astir $900 cardinal successful Disney, declined to remark connected Tuesday.

Unless Peltz settles with Disney, investors volition ballot this twelvemonth connected whether helium should beryllium connected the company's board. Last year, the yearly shareholder gathering was held connected March 9.

Reporting by Dawn Chmielewski successful Los Angeles and Eva Mathews and Aditya Soni successful Bengaluru Editing by Shinjini Ganguli and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

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