Trian Fund Management LP’s Nelson Peltz could have a bit of an uphill climb with his Walt Disney Co. (DIS) campaign partly because another activist, Third Point LLC, came in with similar demands and some success, according to Woolery & Co. PLLC’s Matt Saur.
Saur spoke to the Activist Investing Today podcast about activism at the entertainment giant, his expectations for deal-related insurgencies in 2023 and what it was like working with Carl Icahn and partner Darwin Deason on their blockbuster Xerox Holdings Corp. (XRX) board and C-suite shakeup.
Saur, who founded Woolery & Co. with veteran adviser Jim Woolery, said Peltz appears to be seeking a seat on Disney’s board after Third Point’s Dan Loeb in September settled with the entertainment giant to add a director — and it subsequently replaced CEO Bob Chapek with its former CEO, Robert Iger.
“Trian at a high level seems to be running a similar campaign to one they conduct with a lot of success, like at Procter & Gamble,” Saur said. “They want a board seat and are looking at the CEO spot and looking for succession plan and cost and operational improvements.”
He added, however, that Third Point already got a director, and a new CEO was installed along with a cost reduction plan that “the market reacted positively to.”
For Trian to be successful, Saur said, it may need to consider a bit more than succession planning. “I think that M&A could be something that is at the heart of this campaign. I could be wrong, but they are going to need something bigger to view it as impactful,” he said.
Separately, Saur, discussed the Icahn-Deason 2019 campaign at Xerox, saying that “when Icahn speaks, people listen and you are going to get attention.”
Meanwhile, beyond Disney and Xerox, Saur talked about his views for M&A and activism more broadly, noting that acquisition and divestiture pushes are likely to continue since organic growth is challenged now, with investors discounting future growth prospects.
“Management teams will still need to find growth, and they will start looking into the market for M&A, as competitors have a depressed value right now and provide an opportunity to consolidate,” he said.
Saur also said that both PE and strategics have a lot of dry powder they need to deploy, despite the rising interest rate environment, and he discussed expectations for de-SPAC consolidation and why he thinks anti-ESG activists are here to stay.
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