ValueAct’s involvement increases pressure from activist investors on Walt Disney

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ValueAct Capital has built a significant stake in Walt Disney, adding another activist investor to the entertainment company’s shareholder list as it struggles with a declining stock price and a decline in its traditional television business.

The San Francisco-based company has not disclosed the size of its stake in Disney, but it is one of its largest positions, people familiar with the situation said. ValueAct began expanding its position in the media group this summer.

Shares of Disney rose three percent on Wednesday morning after CNBC announced ValueAct’s investment.

Disney shares have fallen 40 percent in the past two years as the company struggles with a money-losing streaming business and the decline of its once-profitable traditional television networks. Chief Executive Bob Iger returned a year ago to turn the company around and has cut about 8,000 jobs to cut costs.

Disney, like other major U.S. media companies, has been under pressure from investors to curb wasteful spending during the streaming boom as Wall Street shifted its focus to profitability.

Over the past year and a half, activists like Dan Loeb and Nelson Peltz have set their sights on Disney. Peltz’s Trian Partners recently increased its stake in the group and is seeking multiple board seats after initially calling off a proxy fight earlier this year.

ValueAct, a $12 billion company led by co-chief executives Mason Morfit and Robert Hale, announced a stake in music streaming group Spotify in February. In January, the fund secured a seat on the board of software giant Salesforce, which had also come under pressure from several activist investors.

In a call with investors last week, Iger said Disney was ready to “move beyond the repair phase and start building our businesses again,” promising to cut another $2 billion in costs next year.

Disney and ValueAct declined to comment.