Walt Disney Co (NYSE: DIS) is trading up in extended hours after naming Mark Parker its Chairman of the Board.
Disney is opposing activist Nelson Peltz
Parker has previously served for four decades in a similar capacity at Nike Inc. Disney also confirmed in a release on Wednesday that it was against Nelson Peltz (activist investor) getting a board seat.
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The Board does not endorse the Trian Group nominee, and recommends that shareholders not support its nominee, and instead vote for all the company’s nominees.
In November, Peltz’ Trian Fund Management revealed an $800 million stake in Walt Disney Co.
The activist investor reportedly wants to cut costs and make operational improvements. Peltz had also opposed the return of Bob Iger as the Chief Executive of Disney. Shares of the entertainment conglomerate are currently down over 20% versus mid-August.
Jim Lebenthal reacts to the development
Simply put, Disney seems to be headed for a proxy fight with Nelson Peltz.
Reacting to the news on CNBC’s “Closing Bell: Overtime”, Cerity Partners’ Jim Lebenthal said he was “cautiously optimistic” on the development but added:
Where the stock and the company is right now, I’m not sure I want the distraction of a proxy fight. We need execution. But Nelson Peltz is one heck of an investor. If it were anybody other than him, I would not be optimistic.
Parker will be replacing Susan Arnold as the Executive Chairman of Walt Disney Co – a role she held for about fifteen years. In November, the mass media company announced cost cutting initiatives that included a targeted hiring freeze and some job cuts.
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