Loeb unveils fresh Disney stake and pushes for ESPN spin-off
Daniel Loeb’s activist hedge fund Third Point revealed a new position in Disney today and began agitating for a raft of changes, including spinning off cable sports channel ESPN and announcing new share buybacks.
The stake marks a reversal by billionaire Loeb who liquidated a previous position in Disney during the first quarter.
“Our confidence in Disney’s current trajectory is such that we have, in recent weeks, repurchased a significant stake in the Company,” Loeb wrote to Disney CEO Robert Chapek in a letter seen by Reuters.
Loeb laid out a list of changes he feels should be pursued in order to boost the company’s fortunes and told Chapek that the firm should cut costs, pay down debt and buy back shares.
A proposed ESPN spin-off marked Loeb’s biggest suggestion for the firm, as he urged Disney to hire bankers and lawyers to “reassess the desirability of the transaction in the current environment”. The firm has previously mulled breaking off the sports broadcaster as a separate company.
Loeb also criticised the make-up of Disney’s firm’s board, saying there are “gaps in talent and experience as a group that must be addressed”. He added that Third Point had identified candidates to step in as potential directors.
Shares in Disney jumped over two per cent today on the news.