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Nelson Peltz’s proxy battle with Disney heats up (again)

Nelson Peltz’s Trian Fund Management is moving ahead with a proxy fight at Disney (DIS).

The activist hedge fund said in a press release on Thursday morning that Disney extended an offer to Trian to meet with the board but turned down its recent request for representation, including for Peltz himself. The firm said it now intends to take its case directly to shareholders.

According to a source familiar with the matter, Trian is seeking multiple board seats at Disney. Peltz has an ally in former Marvel executive Ike Perlmutter, who has entrusted his stake in the company to Trian.

“Disney’s share price has underperformed proxy peers and the broader market over every relevant period during the last decade and over the tenure of each incumbent director. Investor confidence is low, key strategic questions loom, and even Disney’s CEO is acknowledging that the Company’s challenges are greater than previously believed,” Trian said.

Disney pointed to its cost-cutting efforts in the past year in a statement in response.

“Over the past twelve months, we restructured the company to restore creativity to the center of all our businesses as we significantly reduce costs and drive efficiencies, and we are on track to achieve about $7.5 billion in cost savings – $2 billion more than our original target,” the company said.

Disney also noted that Perlmutter owns 78% of the shares that Peltz claims beneficial ownership of, which amounts to more than 25 million of 33 million shares.

“This dynamic is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors, as Mr. Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against Disney’s CEO, Robert A. Iger, which may be different than that of all other shareholders,” Disney said.

Trian’s statement comes a day after Disney announced in an SEC filing that James Gorman, chairman and CEO of Morgan Stanley, along with Jeremy Darroch, former head of British television company Sky, will join its board early next year.

“While James Gorman and Sir Jeremy Darroch represent an improvement from the status quo, the addition of these directors will not, in our view, restore investor confidence or address the root cause behind the significant value destruction and missteps that this Board has overseen,” Trian said.

Disney shares were flat in afternoon trading on Thursday. The stock, down about 6% since the start of the year, has dipped nearly 20% since the end of Peltz’s previous proxy battle in February.

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