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Activist investor Nelson Peltz reportedly scored a $150 million profit in his 3-month proxy fight against Disney

Feb 11, 2023, 03:05 IST
Business Insider
Nelson Peltz.Heidi Gutman/CNBC via Getty Images
  • Nelson Peltz made a $150 million paper profit on his stake in Disney, according to Bloomberg.
  • Peltz acquired 9.4 million shares of Disney for $92 per share in early November and launched a proxy fight against CEO Bob Iger.
  • Disney stock hit an intraday high of $118 on Thursday after Iger announced a $5.5 billion cost savings plan.
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Activist investor Nelson Peltz has scored a quick paper profit of $154 million since he acquired shares of Disney in early November and launched a proxy fight against returning CEO Bob Iger, sources told Bloomberg.

According to people familiar with the investment, Peltz scooped up 9.4 million shares of Disney at just under $92 per share in November, making the total purchase worth about $865 million.

On Thursday, Disney stock briefly surged to a six-month high, hitting $118 per share. That intraday high made Peltz's stake worth $1.1 billion, representing a paper profit of just under $250 million. Disney stock has trended lower and traded at $108 on Friday, putting gain at around $150 million.

The brief proxy fight launched by Peltz was called off on Thursday after Iger announced a restructuring plan that is expected to save the media giant $5.5 billion in costs and cut 7,000 employees. Disney also said it will consider bringing back its dividend later this year.

"Now Disney plans to do everything we wanted them to do. We wish the very best to Bob [Iger], this management team, and the board. We will be watching. We will be rooting. The proxy fight is over," Peltz told CNBC on Thursday.

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He was seeking a board seat from Disney and criticized the company's $71 billion acquisition of Fox in 2019, even calling into question the competence of Iger, who is widely seen as a hero by Disney's investors. But Disney rebuffed Peltz's proposal and issued a scathing presentation that questioned the activist investors' experience in the media industry and the ideas he was pitching the company.

Ultimately, Peltz seems satisfied enough by the short-term rebound in Disney's stock price, having rallied 16% from his initial purchase price. Disney has surged 24% year-to-date, trouncing the S&P 500's return of just 6% over the same time period.

Peltz may also have been incentivized to count his profits and halt his proxy fight by saving money on the fight altogether. Peltz's Trian Fund said its proxy fight to win a board seat could cost as much as $25 million, but it had so far only spent $1.6 million soliciting investors for their votes.

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