Peltz' Trian ends Disney board challenge after CEO Iger lays out changes

Activist investor Nelson Peltz on Thursday ended his quest for a board seat at Walt Disney Co after Chief Executive Bob Iger laid out plans to fix the home of Mickey Mouse that inspired Wall Street to push the stock price higher.

"The proxy fight is over. This is a win for all shareholders," a spokesperson for Peltz's Trian Fund Management said on Thursday.

The decision, first reported by CNBC, came only hours after Disney reported earnings that topped Wall Street expectations and Iger outlined a corporate restructuring that addresses many of Peltz' criticisms.

"Iger has a lot on his plate," said LightShed Partners media analyst Rich Greenfield. "And an activist just takes time away from figuring out Disney's future."

Disney's stock price climbed 3.6% in Thursday trading. The stock has risen nearly 30% since the start of the year.

Trian owns a nearly $1 billion stake in Disney and had criticized the company for a bungled succession planning, overpaying for new assets and runaway costs.

He was trying to rally shareholders to vote him onto Disney's board, arguing that he had the experience, after sitting on 11 boards, to help turn the company around. Disney disagreed and said he did not have the skills needed to aid the media conglomerate.

Iger, who came out of retirement in November to return to Disney, on Wednesday dazzled Wall Street on his first earnings call since replacing Bob Chapek, who was fired in last year after the company in November reported a 66% drop in quarterly profit.

Iger addressed points Peltz had raised in his proxy battle and said Disney is cutting 7,000 jobs and reorganizing into three divisions - an entertainment unit encompassing film, television and streaming, a sports-focused ESPN unit and one with parks, experiences and products.

"While we are encouraged by Bob Iger's strategic vision for Disney, this is clearly the first phase in Disney's transformation, which will require adept execution," wrote Bank of America media analyst Jessica Reif Ehrlich in an investor note. "Bob Iger has a long, strong track record which provides confidence he will manage this transition for Disney."