In a bid to fend off pressure from billionaire activist Nelson Peltz, Walt Disney Co. CEO Bob Iger has garnered support from two key allies: ValueAct Capital Management and Blackwells Capital. Both investment firms have pledged to stand behind Disney's board nominees and collaborate on strategy as the entertainment giant seeks to enhance its financial performance.

ValueAct Capital Management, which has reportedly amassed a significant holding in Disney, committed on Wednesday to back the company's board nominees at the upcoming annual shareholder meeting. The investment firm also expressed its intention to consult with Disney on strategy, signaling its support for the organization's efforts to improve its financial standing.

Simultaneously, activist hedge fund Blackwells Capital, a proponent of Iger's initiatives, put forth three nominees for the Disney board. These individuals would champion the CEO's strategy and serve as an alternative to Peltz's Trian Fund Management.

However, while Blackwells expressed support for Iger, the fund criticized the cooperation agreement between Disney and ValueAct Capital Management. Blackwells termed the accord as a "disappointing defensive move" by Disney and called for offering shareholders a more robust choice in directors to ensure the future success of the company.

The backing from both ValueAct and Blackwells provides CEO Bob Iger with a public relations victory and intensifies the pressure on Nelson Peltz's Trian Fund to outline an alternative vision for Disney's future.

Iger has faced mounting pressure from Trian since his return as CEO in late 2022. At that time, Disney, under the leadership of Bob Chapek, was grappling with significant losses in its streaming services and underwhelming performance at the box office. In response, Iger initiated measures to cut costs by approximately $7.5 billion and eliminated 8,000 jobs.

Trian, which holds around $3 billion of Disney stock, equivalent to 1.8% of shares outstanding, is demanding more significant changes. Peltz asserted that Disney mishandled its succession plan and voiced concerns about the close ties between Iger and the current board. Peltz, along with former Disney CFO Jay Rasulo, proposed joining the board to address governance and compensation issues that have plagued the company for decades.

Blackwells, a smaller and less recognized fund, put forth nominees that may appeal to Disney shareholders who believe a refreshed board could support Iger but object to Trian's direct approach. According to Reuters, Blackwells owns approximately $5 million worth of Disney shares.

In a previous statement, Blackwells emphasized that shareholders deserve the opportunity to continue supporting Disney's ongoing transformation under the current board and CEO. The fund labeled Peltz's efforts as driven by personal animus towards Iger and an ego-driven urge to claim credit for a transformation that is already underway.

The actual size of ValueAct's stake in Disney remains uncertain. However, its increasing involvement is anticipated to accelerate shareholder-friendly initiatives within the company. Iger has reportedly maintained a cordial relationship with ValueAct CEO Mason Morfit, whose spouse, actress Jordana Brewster, owns a home near Iger.

Speaking on Wednesday, Morfit highlighted Disney's robust intellectual property, sports brand, and theme park assets and stated that the company is well-positioned to lead the media industry's transition to digital platforms. Iger echoed this sentiment, noting that Disney has had constructive conversations with ValueAct over the past year and welcomes their input as long-term shareholders.

At the shareholder meeting scheduled for the spring, Blackwells has nominated three individuals for the Disney board: Jessica Schell, a former Warner Bros. executive specializing in content distribution; Craig Hatkoff, co-founder of the Tribeca Film Festival; and Leah Solivan, founder and former CEO of TaskRabbit Inc.

Disney has proposed Morgan Stanley Chairman James Gorman and veteran media executive Jeremy Darroch as its board nominees. The company has committed to reviewing Blackwells' nominees and providing a recommendation to the board.

Trian responded to the recent developments by welcoming other shareholders attempting to help rectify the company's perceived shortcomings. The fund believes that Peltz and Rasulo's presence as "independent voices and catalysts for much-needed change" is necessary to address the long-standing concerns of Disney shareholders.