Disney (DIS) securing support of activist investor ValueAct Capital is a 'win' amid its ongoing proxy battle with Trian Fund CEO Nelson Peltz, according to TD Cowen Managing Director Doug Creutz.
“Peltz winning in a proxy fight was a very long shot to begin with, and it's an even longer shot now,” Creutz told Yahoo Finance Live. "Disney getting ValueAct to support their view is good optics for Disney... it could help dissuade anybody else from saying, 'Hey, maybe Peltz is right.'"
Creutz added: "Iger’s focused on doing what he can do to turn the business around, which involves figuring out what they're going to do with their linear networks and fixing their content production pipeline.. Neither of those things are issues that have easy solutions or solutions that Peltz can help with."
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
SEANA SMITH: In Disney's boardroom battle, today is the deadline for Disney's shareholders to nominate directors to the board. Now the House of Mouse is gaining the support of a significant shareholder, activist investor ValueAct Capital Management reaching an agreement with Disney earlier this week to support the company's board nominees at its upcoming shareholder meeting.
Now this comes as Disney fends off a proxy battle with Nelson Peltz. We want to bring in Doug Creutz, he's TD Cowen managing director of media and entertainment. Doug, it's great to see you. So let's talk about the fact that ValueAct is now on the side-- or I should say Disney now has ValueAct on board. To what extent do you think this is going to help Iger fend off some of the pressure that we're seeing from Peltz?
DOUG CREUTZ: Well, I don't know that I think he needed a lot of help. I mean, Peltz and his group, they just-- they don't have that much of a share position. Disney is a huge company. And so it would be very difficult for Peltz to amass enough shares to have a chance of really winning a vote. Obviously, if he could get other people to go along with him, that would help.
Disney getting ValueAct to support their view, the optics of it certainly are good for Disney. It says, hey, here's another major investor with interest in these sorts of things that believes that our view is the correct one, to help dissuade maybe anybody else from saying, hey, maybe Peltz is right.
At the end of the day, I don't-- I don't think it would have mattered that much if they had gotten ValueAct or not. I do think-- I think Peltz, winning in a proxy fight was a very long shot to begin with. And it's an even longer shot now.
SEANA SMITH: Well, then, what can be done to appease not only Peltz but also activist investors in general here?
DOUG CREUTZ: Well, I don't know that you need to appease Peltz. I mean, he's free to go buy shares and say what he wants, but he doesn't have any more power or rights than that. He can make a lot of noise in the press. It's a distraction for Disney. It's not something they necessarily want.
But the just say no defense can be a pretty effective one if you're willing to turn your ears off and not worry about what people are saying. And I think Disney would like this to go away, right? They've got real issues with their business that they need to deal with and not be distracted.
The fact that some of the people involved in this are former Disney people makes it even a little sort of stickier from a PR standpoint. But again, at the end of the day, I just don't think Peltz has the juice here to force Disney to do anything.