Disney Accepts Activist Hedge Fund's Demand for 'Board Reshuffle'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Walt Disney has accepted the demand of a U.S. activist hedge fund to revamp its board of directors.

On the 30th (local time), Disney reported to the U.S. Securities and Exchange Commission (SEC) that it will appoint Carolyn Everson, a former executive of Meta Platforms, the parent company of Facebook, as a new director.

According to the disclosure, Everson will join Disney's board starting in November.

Third Point, a hedge fund led by billionaire investor Dan Loeb, purchased $1 billion worth of Disney shares in August and demanded the addition of new directors.

The argument was that experts with experience in digital advertising and consumer data should be added to the board to enhance shareholder value.

The Wall Street Journal (WSJ) analyzed that Disney initially rejected Third Point's demands but appeared to find a compromise by using the appointment of Everson as a card.

Everson served as an advertising business executive at Meta for over 10 years.

Following Disney's actions, Third Point decided not to recommend separate directors at the next shareholders' meeting and agreed to a hostile takeover prevention clause that prohibits acquiring more than 2% of Disney's shares.

Earlier, Third Point had urged management to spin off ESPN, Disney's sports channel, but withdrew this demand earlier this month.

Bob Chapek, Disney's Chief Executive Officer (CEO), stated, "We have a productive relationship with Third Point," and Dan Loeb, Third Point's CEO, said, "We are satisfied with the dialogue with Disney's management."