Disney enters "information-sharing agreement" with ValueAct as proxy battle looms

Investing.com -- Walt Disney (NYSE:DIS) has announced that it has entered into an "information-sharing agreement" with ValueAct Capital Management, as the entertainment giant faces a looming battle with activist investors over its future.

In a statement on Wednesday, Disney said that the move will enable it to "consult with ValueAct on strategic matters," arguing that the investment firm has "extensive experience" in helping media and technology groups navigate business transformations.

"We welcome their input as long-term shareholders,” said Disney Chief Executive Bob Iger in a statement.

ValueAct also confirmed that it will back Disney's recommended slate of nominees to its board of directors at the company's 2024 annual shareholders meeting.

The announcement comes as activist hedge fund Trian Partners is planning to nominate two candidates -- co-founder Nelson Peltz and former Disney executive Jay Rasulo -- to Disney's board at the gathering. Trian called the decision an attempt to correct what it described as "underperformance" in Disney's recent results, adding that the company's board is "too disconnected" from shareholders' interests.

Separately, fellow activist Blackwells Capital will put forward the nominations of three directors to Disney's board, Reuters reported on Wednesday, citing people familiar with the matter. The sources told Reuters that Blackwells is offering a choice to stakeholders who would like to see a revamp of Disney's board but remain supportive of Iger.

Shares in Disney were slightly higher in premarket trading in New York on Wednesday.

Iger returned to the helm of Disney in November 2022, and has since embarked on a sweeping overhaul of the business that has led to the dismissal of around 7,000 employees and billions of dollars in cost reductions. Iger has vowed as well to revitalize Disney's movie studios following string of disappointing releases.

Disney posted better-than-expected fiscal fourth-quarter results in November. Strength at Disney's theme parks division helped offset weakness at its traditional television business, while subscriber growth at its streaming services also topped expectations.

Iger said at the time that Disney was re-entering a "building" phase.