Disney climbs on report Nelson Peltz has boosted stake, seeks board seat

Updated at 9:41 am EDT

Walt Disney  (DIS) - Get Free Report shares edged higher in early Monday trading following reports that billionaire activist Nelson Peltz has boosted his stake in the media and entertainment group and will assume seats on the board for his Trian Fund Management investment group. 

The Wall Street Journal reported Sunday that Peltz, who has been pushing for a seat on the board since late last year, has lifted his stake in the group to around $2.5 billion. nearly four time the level he held at the end of the second quarter.

Peltz, who has spoken publicly about a CEO succession plan, the improvement of operating margins at the group's direct-to-consumer business and the reinstatement of company's dividend by 2025, backed-off his earlier push for board following a series of cost-reductions and job cuts laid out by CEO Bob Iger in February. 

Peltz described Disney as having an "incredible legacy as one of the leading and most successful consumer entertainment companies in the world" in early January, but argued that, in recent years, the company had "'lost its way resulting in a rapid deterioration in its financial performance from a consistent dividend-paying, high free cash flow generative business into a highly leveraged enterprise with reduced earnings power and weak free cash flow conversion."

Disney shares were marked 0.65% higher in early Monday trading to change hands at $83.47 each. 

Last month, Disney unveiled surprise plans to double investment in its parks and cruise line business, telling an investor day event that it would allocate $60 billion over the next ten years to "expand and enhance" its Parks & Experiences division.

Parks and Experiences delivered around $8.3 billion in third quarter revenues, Disney reported last month, up 13% from the prior year period and around 37% of the group's overall total. 

However, in terms of operating income, the division was, and remains, its most-profitable: Parks and Experiences generated $2.425 billion in operating profits, an 11% increase from last year, offsetting and 18% decline in the group's Media and Entertainment Distribution segment. 

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