Shareholder Proposal for Disney to Spin Off Real Estate into REIT (& Star Wars)

[AstroBlasters]

https://www.morningstar.com/news/ma...-proposes-splitting-up-company-in-proxy-fight

I hope this doesn’t go through…. I would have to imagine all of DVC would get moved into a REIT or spun off into a separate entity.

We thought they were making them look like Marriott’s now….

https://www.blackwellscap.com/press...g-and-releases-letter-to-fellow-shareholders/

“

Disney has an almost unimaginable portfolio of real estate around the world. The Company owns tens of thousands of acres of land, more than 30,000 of the world’s most profitable hotel rooms, thousands of vacation club units and more. The value of Disney’s real estate holdings is obscured by the Company’s conglomerate structure. But, Disney’s real estate is also the potential source of long duration capital to address balance sheet and income statement challenges and opportunities.”

“Disney could separate its owned real estate, which represents approximately 44% of its market capitalization at cost, into an independent publicly listed REIT or a series of investment vehicles in which the shares, cash and/or interests could be distributed to shareholders. “
​

 

[walt34]

Sounds pretty stupid or at least short sighted to me. Separating assets makes sense if the value is incidental and not connected to the core business (companies owning real estate that has since increased in price independently of the core business of the company). The reason why most of this real estate and these hotel rooms are particularly valuable is the proximity to theme parks and the connection to Disney IP. Severing this connection will have an impact in the long run and the asset price might reflect this before the sale can go through. I believe this real estate is more valuable as part of the WDC.

 

[CarolMN]

If the real estate supporting the DVC resorts is sold, it would have to be done subject to the lease. DVC Members should not see any change due to a sale.

 

[AstroBlasters]

If the real estate supporting the DVC resorts is sold, it would have to be done subject to the lease. DVC Members should not see any change due to a sale.

There is nothing saying that Disney has to be the one running the timeshare… similar to how other companies spun off their time shares into separate entities.

So yes, we would have access to the properties as owners…. but it might be run by a 3rd party….. and they could be penny pinchers concerned about “shareholder return” over the concerns of the membership.

I would think this could also kill all membership extras with the parks, but who knows.

From Disney’s side it would give them an infusion of cash to pay off debt, put more money back into the parks, and potentially another customer to license out their IP for theming.

To be clear, I do not like this idea…. but it has now entered my mind as a risk I have to consider with my DVC points.

 

[MyDogTink]

There is nothing saying that Disney has to be the one running the timeshare… similar to how other companies spun off their time shares into separate entities.

So yes, we would have access to the properties as owners…. but it might be run by a 3rd party….. and they could be penny pinchers concerned about “shareholder return” over the concerns of the membership.

I would think this could also kill all membership extras with the parks, but who knows.

From Disney’s side it would give them an infusion of cash to pay off debt, put more money back into the parks, and potentially another customer to license out their IP for theming.

To be clear, I do not like this idea…. but it has now entered my mind as a risk I have to consider with my DVC points.

When I first read your post, my immediate thought was membership extras. There could be no connection between Disney and a third party operator. Argh this would not be good.

 

[CarolMN]

There is nothing saying that Disney has to be the one running the timeshare… similar to how other companies spun off their time shares into separate entities.

While that is certainly true, it is a separate issue from a sale of the underlying property.

 

[AstroBlasters]

When I first read your post, my immediate thought was membership extras. There could be no connection between Disney and a third party operator. Argh this would not be good.

I guess Disney could retain an ownership stake in the new entity, which may provide enough incentive to encourage membership extras over some period of time….. but eventually some soulless finance people would kill them off because Disney would sell the rest of the REIT and take the cash.

 

[Anthony1971]

While I certainly enjoy the extras we get now however when we bought in 2003 the extras were rather sparse.
With that DVC itself if no new is for sale serves no real income for Disney. Yes Disney has ROFR which is nothing more than a way to control the price and they may make a few bucks from the buybacks. DVC does however guarantee in bad economic times there will be people in hotels paying for food and going to the parks and this will not change should Disney own DVC or not.... Bottom line even if there are no extras and if somehow Disney lets the hotel to be poorly managed or worse... There will 99.9% be someone willing to buy your points for 100 bucks and pay the dues for cheap stays at Disney. So whoever owns the property loses nothing.
The better question is will Disney let it is premium brand name take a hit?
I personally assume it would be years.... off before Disney would relinquish all control over the hotels/DVC but in the end Disney will not be a top destination forever and this is a way to cash out at possibly the top of the market. 10 years from now we may be paying to virtually ride Soarin with the option of being there live.
I am not for what this proposes but in the end it can make a lot of sense.

 

[Tigger2ntinkerbell]

Just received my proxy in the mail today. Going over the Ballot and reading what everyone posted here.

Is this part allowed?
Did anyone have opinion about #5 - Board Recommendation - Against . I'm trying to figure all this out

 

[Tigger2ntinkerbell]

Never mind, I found the information I needed.

 

[Herschw]

It's understandable to have concerns about potential changes to Disney's structure, especially when it comes to assets like the Disney Vacation Club (DVC). While the proposal to spin off real estate into a Real Estate Investment Trust (REIT) could have implications for DVC, it's important to wait and see how things unfold.

 

[SpaceMountain77]

Blackwells Capital is seeking seats on The Walt Disney Company's Board of Directors. The press release is only an idea for supporting their three nominees.

Presently, only Nelson Peltz, of Trian Fund Management, is viewed as a possible contender.

 

[AstroBlasters]

It's understandable to have concerns about potential changes to Disney's structure, especially when it comes to assets like the Disney Vacation Club (DVC). While the proposal to spin off real estate into a Real Estate Investment Trust (REIT) could have implications for DVC, it's important to wait and see how things unfold.

IMO, there is nothing good about this proposal except for the brokers that earn fat fees to sell the properties in bundled investments to clients. Once they have earned their commissions it will be like Chapek on steroids is managing the properties. The magic would die.

 

[Leventerso]

It's understandable to have concerns about potential changes to Disney's structure, especially when it comes to assets like the Disney Vacation Club (DVC). While the proposal to spin off real estate into a Real Estate Investment Trust (REIT) could have implications for DVC, it's important to wait and see how things unfold.

In the meantime, if you're looking for vacation properties, you might consider exploring options like the New Emaar villas offered by reputable resorts like the Grand Club Resort. They provide luxurious accommodations and a reliable vacation experience, regardless of any changes happening in the industry.

 

[Chuck S]

I already voted, following the Disney Boards recommendations. I hope most shareholders will do the same. The last thing shareholders need is breaking up the company and selling it piecemeal.

 

[HyperspaceMountainPilot]

I already voted, following the Disney Boards recommendations. I hope most shareholders will do the same. The last thing shareholders need is breaking up the company and selling it piecemeal.

Same and same. I wasn’t going to bother voting my few dozen shares, but it sounds like it’s going to be close, and Peltz sees each and everyone of us as a cash cow that could be milked even more aggressively. Disney needs to make some changes but listening to a corporate raider would be changes in the opposite direction of what they need.

 

[DonMacGregor]

I actually wasn't going to vote (I've owned stock since I first started working at Disneyland in 1981 and I've maybe voted 3 or 4 times), but seeing the open letter from George Lucas, a guy who arguably has plenty of beefs with Disney, gave me the push I needed to vote the Board-recommended slate.

 

[MerlinandtheMouse]

Same and same. I wasn’t going to bother voting my few dozen shares, but it sounds like it’s going to be close, and Peltz sees each and everyone of us as a cash cow that could be milked even more aggressively. Disney needs to make some changes but listening to a corporate raider would be changes in the opposite direction of what they need.

Really? I didn’t realize it was looking close that’s definitely a bit worrisome. I fully acknowledge that I have no clue as to how people do or don’t vote when it comes to shareholder voting in any company but I imagine people don’t vote all that often, I’ve certainly never voted as a shareholder in other companies I own stock in. My worry, and assumption, is that most who vote are those upset with what their portfolio currently looks like and therefore they will be the ones who will want a change, less so the folks who are fine with things as they are and accept the status quo. I hope I’m wrong.

 

[HyperspaceMountainPilot]

Really? I didn’t realize it was looking close that’s definitely a bit worrisome. I fully acknowledge that I have no clue as to how people do or don’t vote when it comes to shareholder voting in any company but I imagine people don’t vote all that often, I’ve certainly never voted as a shareholder in other companies I own stock in. My worry, and assumption, is that most who vote are those upset with what their portfolio currently looks like and therefore they will be the ones who will want a change, less so the folks who are fine with things as they are and accept the status quo. I hope I’m wrong.

I wouldn't say "I'm fine with things" but it didn't seem like any of the challengers would do anything that would improve what I care about (MORE RIDES SOONER) and frankly I think continuing to squeeze Disney families (especially without offering new rides, lands, experiences more than once ever 24-48 months) is going to be bad for the Disney brand and stock sooner than you might think.

 

[MerlinandtheMouse]

I wouldn't say "I'm fine with things" but it didn't seem like any of the challengers would do anything that would improve what I care about (MORE RIDES SOONER) and frankly I think continuing to squeeze Disney families (especially without offering new rides, lands, experiences more than once ever 24-48 months) is going to be bad for the Disney brand and stock sooner than you might think.

I completely agree. I’m hopeful that with the added pressure of upset shareholders, as well as, Universal/Comcast breathing down their neck with all the great things coming from their parks division, Disney leadership recognizes that the era of being passive with the parks is over.