Disney Investor Calls for Meeting
Media: Providence Capital wants institutional shareholders to discuss
the company's corporate governance issues, including the board's
September 12, 2002|RICHARD
VERRIER and JAMES BATES | TIMES STAFF WRITERS
Tapping impatience among some investors in Walt Disney Co., New York
investment banking company Providence Capital is calling a meeting
next week of institutional shareholders to discuss "critical issues"
surrounding the entertainment company's performance.
Providence Capital, headed by well-known corporate activist Herbert
Denton, said the Tuesday meeting will focus mainly on corporate
governance issues, including the remaking of Disney's board and a
succession plan for Disney Chief Executive Michael Eisner.
view of Disney's recent stock performance, we believe the board would
welcome the views of its largest stockholders prior to instituting
changes in the company's governing body," Providence said in a
The meeting will be held a week before Disney's board of directors is
scheduled to meet to discuss, among other things, various steps to
reform the company's board. In August, Eisner said that Disney will
shrink its board, reduce the size of its committees and strengthen its
independence by year's end. In a government filing last month, the
company disclosed that three board members have relatives who were
employed by Disney.
"We believe we have a good sense of how our major shareholders feel
about the company," Disney spokesman John Spelich said. "We welcome
input from all our shareholders."
Eisner and Chief Financial Officer Tom Staggs also will hold what the
company described as routine meetings with investors and analysts
Friday in New York.
The meetings come as Eisner faces heavy pressure from investors and
some influential board members to bolster the company's stock price
and improve the company's earnings, which have been hurt by sagging
theme park attendance and weak ratings at its ABC television network.
Disney's stock price, which lost 7 cents on Wednesday to close at
$16.18 on the New York Stock Exchange, fell to an eight-year low last
"The company is clearly reaching out to investors and that's good,"
said analyst Jordan Rohan of Wit SoundView.
Denton wouldn't say how many shares Providence owns, but described his
company as a small shareholder.
Providence bought shares in the company in late summer when Disney's
stock traded at around $13 a share, believing the company was
Providence is an activist investor that has waged fights with ICN
Pharmaceuticals Inc., Aetna Inc. and Tyco International Ltd.
Providence has two or three meetings like this a year. Providence has
advised the California Public Employees' Retirement System, among
Denton has faced criticism for accepting fees from companies that he
has targeted. He called such criticism a cheap shot. "We're not
looking for any fees from Disney," he said.
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