(Bloomberg) — Blackwells Capital contends that Walt Disney Co. should have disclosed that ValueAct Capital Management was managing some of its pension fund assets, stirring tensions between the two activist investment firms as they pursue different agendas at the entertainment giant.
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New York-based Blackwells told Disney shareholders in a letter that the company’s board failed to properly disclose that ValueAct or its affiliates had overseen more than $350 million of its pension assets, according to a statement Monday.
Blackwells estimates that ValueAct earned fees for those services ranging from roughly $55 million to $95 million, citing Disney filings for fiscal years 2013 to 2022.
Along with another activist investor, Blackwells is pushing for changes to the board of Disney, which received the public backing of ValueAct and its Chief Executive Officer Mason Morfit earlier this year. In its letter, Blackwells said shareholders should have been made aware of the pension arrangement prior to that show of support.
“The board has repeatedly trumpeted ValueAct’s endorsement in proxy materials mailed to millions of shareholders,” Blackwells wrote. “Can this board believe that shareholders are able to evaluate the significance of ValueAct’s endorsement without a full understanding of the relationship?”
By the time ValueAct announced it had built a stake in Disney, the company’s pension fund had fully redeemed its investment in the ValueAct fund, said people familiar with the matter who asked not to be identified because the information was private.
A representative for ValueAct declined to comment, while a spokesperson for Blackwells declined to comment beyond the firm’s statement. A representative for Disney didn’t immediately respond to a request for comment.
ValueAct pledged in January to back Disney’s board nominees at the entertainment company’s next annual shareholder meeting, scheduled for April 3. That has made the investment firm an important ally for Disney as it seeks to stave off Blackwells, as well as a separate effort by Nelson Peltz’s Trian Fund Management to grab seats on its board and push through strategy changes.
Read More: Peltz Publishes Disney ‘Restore the Magic’ Plan Ahead of AGM
–With assistance from Thomas Buckley.
(Updates with fund redemption in seventh paragraph)
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