Disney may have pushed Nelson Peltz further from its board, with giant BlackRock reportedly backing the company’s list of directors. The company is Disney’s second largest shareholder with approximately 4.2%.

The news, first reported in the Wall Street Journal, followed T. Rowe Price, a 0.5% owner, speaking out in support of CEO Bob Iger and Disney as shareholders enter the final day of voting ahead of the annual meeting which takes place on Wednesday. 10am ET/1am PT. The board has been at the center of the most expensive proxy fight over the past three months between record-breaking directors and CEO Bob Iger against Peltz, the billionaire activist investor who has targeted Disney over strategy, stock price and, most importantly, poor succession planning.

The deadline for voting is 11:59 PM tonight. The WSJ said that half of all shares have been voted on so far, so things could still change.

Disney declined to comment. BlackRock did not respond to requests for comment.

Peltz’s Trian Partners will vote on 1.5% of Disney, his shares and those of ally Ike Perlmutter. He wants board seats for himself and former Disney director Jay Rasulo. To that end, he has asked shareholders to oust Disney nominees Maria Elena Lagomasino and Michael Froman. There are 12 director seats. The nominees with the most votes win.

Trian and Disney have been slinging mud at each other since the beginning of this year, bombarding shareholders with frequent and extensive messages, videos and charts. Disney has racked up a bill of at least $40 million for outreach, including phone calls to individual private shareholders. The company has a larger than average private shareholder base.

Trian has spent about $25 million on his campaign. Battle lines have formed. BlackRock is a big hit. There’s no word on Disney’s other two largest shareholders, Vanguard and State Street.

The scorecard so far: Inside the Disney camp – proxy advisory film Glass Lewis, shareholders New York City Retirement Systems and ValueAct, as well as Walt Disney family members, former CEO Michael Eisner, Laurene Powell Jobs, George Lucas and actor Josh Gadd (voice from Olaf Frozen).

In the Peltz camp – ISS, the largest proxy advisory firm recommended voting for Peltz (not Rasulo), which was the biggest blow Disney took in the fight. A much smaller advisor, Egan-Jones, recommended votes for both Trian nominations, as did investors Neuberger Berman and CalPERS (California Public Retirement Systems).

It was a three-ring circus, with another institutional investor, Blackwells Capital, fielding three of its own nominees for the Disney board. It has also spent millions promoting them, but without getting much attention.

An SEC rule requiring a so-called universal proxy card has simplified shareholder governance challenges. Since September 2022, proxy cards must contain the names of all nominated director candidates proposed by any party, and shareholders voting by proxy can choose any combination of nominees. Previously, only shareholders who voted in person at annual meetings could mix and match.

“You can tell it’s getting close because they (Disney) are really scrambling and communicating and trying to get every last vote in,” said Michael Levin of The Activist Investor, which advocates for shareholders. It apparently wasn’t close enough for Disney to offer Peltz a seat in a last-minute deal, as sometimes happens in proxy fights and some expected here.

“There are sky-high egos involved,” says Levin. Meanwhile, “it has become a little less about the direction of the company, and more about who will have the upper hand.”

“The debate about what he (Peltz) knows about the media business and how he’s going to solve streaming is fun, but Disney has 300 people in the company who have ideas about that. The kind of thing that Peltz (would) contribute is pure governance. The core problem with the board is that they are completely loyal to Bob Iger… So you have eleven people who are consistently unable to push him back, to question him. Nelson Peltz would (not) have that problem.”

This is how Peltz partially described the Disney sign. The company disagrees with this characterization.

From a Wall Street perspective, the outcome won’t change Disney’s investment thesis much.

“I don’t think my opinion of Disney would change. I don’t think (Peltz has) had any constructive new comments or thoughts that are earth-shattering. I think he would be difficult in the boardroom and I agree with what Iger has said, that it is a distraction he doesn’t need,” said one analyst. “The difference between Nelson Peltz being on the board and not being on the board will be about how much cr*p he’s going to give Iger.”

A director Peltz “could mean a greater chance that Iger actually retires in 2026,” he added. But Peltz or no Peltz, there is pressure to arrange the succession properly this time.

If Peltz loses, “there will also be the thought that if the stock price goes down, he will come back.”

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