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Disney enters confidential agreement with ValueAct as it continues proxy fight with Nelson Peltz

The Walt Disney Company and activist investor ValueAct Capital Management L.P. said Wednesday they have entered a confidentiality agreement as the entertainment giant continues its proxy fight with rival firm Trian Fund Management, led by billionaire Nelson Peltz.

The agreement will allow Disney DIS, +0.47% to consult with the investment firm on strategic matters, including via meetings with the board and management. ValueAct will support the board’s recommended slate of nominees for election to the board at the 2024 annual meeting, the companies said in a joint statement.

“ValueAct Capital has a track record of collaboration and cooperation with the companies it invests in, and its Co-CEO Mason Morfit has been very constructive in the conversations we’ve had over the past year. We welcome their input as long-term shareholders,” Disney CEO Bob Iger said in a statement.

The news comes as Disney seeks to stave off Trian, which has amassed nearly 33 million shares of Disney stock and has been agitating for change for the past year, including adding Peltz and former Walt Disney Co. Chief Financial Officer Jay Rasulo to the board.

San Francisco-based ValueAct has investments in a range of companies, including Spotify SPOT, +0.47%, the New York Times NYT, -2.09%, 21st Century Fox, Nintendo, Microsoft MSFT, -1.37%, Adobe ADBE, -2.77% and Salesforce CRM, -2.66%.

The firm has also built a stake in Disney that has not yet been disclosed but is sizable, according to the Wall Street Journal, which cited people familiar with the matter.

Disney declined to add Peltz to the board last year. Iger, who returned to head the company a year ago for a second round as its CEO, has struggled to revive the company’s languishing stock price and refocus its businesses. The company late last year unveiled a plan to make streaming, theme parks and cruises, studios and the ESPN sports network the four building blocks of its strategy.

In November, Disney bowed to one of Peltz’s demands when it resumed its dividend after suspending it at the start of the coronavirus pandemic.

The company declared a 30-cent cash dividend per share, which will be payable Jan. 10, 2024, to Disney shareholders of record as of Dec. 11.

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Disney later disclosed that Blackwell Capital LLC is also planning to nominate three individuals to its board at the 2024 meeting.

The stock has gained 2% in the last 12 months, while the S&P 500 SPX, -0.57% has gained 24%.

See also: Disney CEO Bob Iger walks back comments about asset sales

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