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ValueAct Capital has built a significant stake in Walt Disney, adding another activist investor to the entertainment company’s shareholder list, as it contends with a sinking share price and a decline in its traditional television business.
The San Francisco-based firm has not disclosed the size of its stake in Disney but it is among its largest positions, said people familiar with the situation. ValueAct started building its position in the media group this summer.
Shares in Disney rose three per cent on Wednesday morning after CNBC revealed ValueAct’s stake.
Disney shares have fallen 40 per cent over the past two years as the company has grappled with a streaming business that is losing money and the decline of its once money-spinning traditional television channels. Chief executive Bob Iger returned a year ago to turn the company around, and has cut some 8,000 jobs in a move to slash costs.
Disney, like other large US media groups, has been under pressure from investors to curb profligate spending during the streaming boom, as Wall Street has shifted its focus to profitability.
Over the past year and a half, activists including Dan Loeb and Nelson Peltz have set their sights on Disney. Peltz’s Trian Partners has recently upped its stake in the group and is seeking multiple board seats, after initially calling off a proxy battle earlier this year.
ValueAct, a firm with $12bn in assets that is run by co-chief executives Mason Morfit and Robert Hale, in February disclosed a stake in music streaming group Spotify. In January, the fund secured a board seat at software giant Salesforce, which had also come under pressure from several activist investors.
On a call with investors last week, Iger said Disney was set to “move beyond the period of fixing and begin building our businesses again”, as he vowed to cut another $2bn from its costs in the coming year.
Disney and ValueAct declined to comment.
