Disney’s Other Activist Investor Wants It to Spin Off Real Estate Holdings and Bet on Virtual Reality

Should The Walt Disney Co. put all of its real estate holdings into a REIT (a “real estate investment trust”)? Should the company pour resources into virtual reality and artificial intelligence?

Blackwells Capital thinks so.

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While Disney is responding to an activist investor fight from Nelson Peltz and his Trian Partners, it also fending off another push for board seats from a smaller activist firm: Blackwells Capital, run by Jason Aintabi. Blackwells filed its proxy statement Tuesday, and also included a whitepaper proposing some ideas to “transform” the company.

Disney has already urged its shareholders not to vote for Trian’s nominees Peltz and James Rasulo, and urged a vote against Blackwells nominees Leah Solivan, Jessica Schell, and Craig Hatkoff (it recruited Donald Duck’s uncle Professor Ludwig Von Drake in the fight).

But Blackwells is now targeting both Disney’s current board (for lacking members with media experience) and Trian, which it calls a “distraction.” “Begging for Board seats is not a strategy that will make any money for shareholders,” Blackwells writes of Peltz.

Perhaps most notably, Blackwells has also issued a whitepaper with proposals for how to improve Disney, urging some substantial changes to its business.

Among other suggestions, Blackwells is urging Disney to consider spinning off its real estate holdings (including presumably Disney World and Disneyland) into a REIT, which it could leverage for cash. Blackwells also suggests that Disney invest more heavily in virtual and augmented reality. “The Board must be more focused on this once in a lifetime shift in consumer behavior and interaction,” the company writes.

Disney’s annual meeting is set for April 3, and the company — and it seems its pair of activists — will be lobbying shareholders over the next two months to sway their votes.

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