Walt Disney’s DIS-N largest investor, Vanguard Group, on Tuesday voted to elect the entertainment giant’s incumbent directors, allowing the company to pull further ahead in a bitter boardroom fight with two hedge funds, sources told Reuters.
The decision by Vanguard, which owned an 8.2% stake in the home of Mickey Mouse at the end of last year, comes just hours before the deadline for a shareholder vote that will guide the future of one of the world’s largest entertainment companies. Vanguard was not immediately available for comment.
Earlier on Tuesday Norges Bank Investment Management, said it had voted to re-elect 11 of the entertainment company’s 12 directors.
These key endorsements added to Disney’s momentum before a Tuesday night deadline for shareholders to decide whether to back Chief Executive Bob Iger’s slate of current directors or five alternative candidates proposed by hedge funds Trian Fund Management and Blackwells Capital.
The contest is the most closely watched boardroom clash in the United States this year, serving as a referendum on the future of the century-old Mouse House as it navigates the entertainment industry’s shift to streaming.
NBIM, which manages the Norwegian Government Pension Fund and owned a 1.2% stake in Disney at the end of last year, said it had voted to re-elect nearly all company directors but withheld its vote for Mark Parker, chairman of Disney’s board.
It did not vote for any candidates proposed by Trian or Blackwells.
Disney did not immediately respond to a request for comment on the vote tally.
While many of the outstanding votes have been cast, people familiar with the tallies said there were still some investors who had not voted but that there was still time before results are announced at the company’s annual shareholder meeting on Wednesday, which will stream live at 1 p.m. EDT (1700 GMT).
Already by late on Monday, Disney had moved ahead in the race with more than 50% of all shares voted and large shareholders including T. Rowe Price having announced their votes for the company, according to people familiar with the matter.
With Vanguard siding with the company, the fight may now be unwinnable for Trian’s Nelson Peltz, two sources familiar with the vote said.
The entertainment giant, valued at $222 billion, is battling billionaire hedge fund investor Peltz, who runs Trian and has argued Disney has lost its creative spark and bungled its succession planning.
Blackwells Capital, a much smaller investment firm, has said it largely supports Disney’s strategy but has a few ideas of its own, including splitting off the company’s real estate holdings. Blackwells also wants to keep Peltz off the board and improve transparency for investors at Disney.
NBIM said it withheld its vote for Parker because shareholders “have the right to seek changes to the board when it does not act in their best interest.”
For every vote, the fund reviews “unsatisfactory financial and strategic performance, mismanaged risk-taking, unacceptable treatment of stakeholders or undesired environmental or social outcomes from company operations,” it said.