- Activist investor Nelson Peltz has lost a long-running proxy battle with Disney CEO Bob Iger.
- The Wall Street Journal reported that Peltz’s hedge fund made about $300 million in profits from the fight.
- Still, Peltz’s time could have been spent on other campaigns instead.
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The proxy battle between Disney and billionaire activist investor Nelson Peltz is over.
Disney CEO Bob Iger will be able to maintain control of the board of directors, the company will be able to focus on producing better content, as Iger says, and Peltz will be… $300 million richer?
according to wall street journalMr. Peltz’s hedge fund, Trian Partners, waged a 16-month proxy battle with Disney that may have netted him about $300 million, according to anonymous sources familiar with the matter.
Most of that new wealth is on paper, the report says.
Last February, Bloomberg reported that Peltz said: Paper profit of $154 million After purchasing 9.4 million shares of Disney. Around that time, Disney’s stock price soared after Iger announced a restructuring plan that would cut 7,000 employees and save the company about $5.5 billion. Trian subsequently withdrew from its initial proxy fight against Disney.
Now, the Journal has reported that Peltz’s company is expected to have made about $300 million in total (a 40% return on investment), considering the estimated $25 million that Tryon spent on the proxy war.
So even if Mr. Peltz loses his long-running proxy battle with Disney and doesn’t get the two new board seats he was hoping for, is this a win-win scenario for activist investors? Or?
Peltz appears to think so, based on comments he made after Wednesday’s shareholder vote.
“Since partnering with us again last October, Disney stock has risen approximately 50%, making it the best performer ever on the Dow Jones Industrial Average,” he said.
But, as the Journal pointed out, Tryon’s $300 million alimony pales in comparison to the company’s massive $10 billion worth of assets under management.
James Park, a corporate law expert at the University of California, Los Angeles, told Business Insider that it was clear that Peltz wanted to win the seat he sought, given the time and energy he devoted to his campaign. Told. After all, Peltz waged two proxy fights against Disney in less than two years.
“That effort could have been used for other investments and campaigns,” Park said. “I’m sure Mr. Peltz is disappointed in this result, since there are easier ways to make money than activism.”
When asked about the outcome of Mr. Peltz’s proxy war, IAC chairman and billionaire Barry Diller said: CNBC’s Squawk Box On Thursday, he called the battle a “huge waste of time” and questioned the value of Petrz’s activist movement.
“There’s too much sound and anger and it doesn’t mean anything,” he says.
A Trian Partners spokesperson did not respond to a request for comment.