(Bloomberg) -- Walt Disney Co. restored its dividend and tightened the rules for nominations to its board, responding to the planned proxy fight announced earlier Thursday by billionaire activist Nelson Peltz.

Peltz’s Trian Fund Management LP, which beneficially holds about $3 billion of Disney stock, said in a statement Thursday that the entertainment giant had rejected its bid for board seats, forcing it to take the “case for change directly to shareholders.”

Trian’s statement, and Disney’s responses, set up a proxy fight for the company’s annual meeting next year. On Wednesday, Disney appointed two new directors, Morgan Stanley chief James Gorman and former Sky executive Jeremy Darroch. 

The appointments “will not, in our view, restore investor confidence or address the root cause behind the significant value destruction and missteps that this board has overseen,” Trian said.

Shares of Disney were little changed at $93.36 in extended trading after the dividend announcement. They were up 6.7% this year through the close Thursday in New York, trailing the 19% gain for the S&P 500 index.

In a statement, Disney said “it’s in the midst of a significant transformation to reinforce our position as the world’s preeminent entertainment company.”

The company also declared a dividend of 30 cents a share for the second half of its fiscal year, following through on a pledge to restore the payout, which was halted during the pandemic.

In addition, Disney tightened requirements for outside nominations to its board, increasing disclosure requirements and forcing would-be board members to respond to a company questionnaire, according to a filing. Anyone soliciting proxies must use a card that is not white. 

Read More: Disney Restores Dividend With 30-Cent, Second-Half Payout

Jason Aintabi, chief investment officer of Disney shareholder Blackwells Capital LLC, said in a statement that “Peltz and Trian need to withdraw this costly and disruptive effort to displace experienced voices in the boardroom. Mindless, drum-beating activism is not the right strategy for shareholders.”

Earlier on Thursday, Disney also pointed out that Peltz is working with a former Disney executive, Isaac Perlmutter, who owns 78% of the stock that Trian beneficially holds.

“Perlmutter was terminated from his employment by Disney earlier this year and has voiced his longstanding personal agenda against” Disney Chief Executive Officer Bob Iger, the company said.

At a conference sponsored by the New York Times on Wednesday, Iger said Disney’s board will consider potential director candidates in line with its regular nomination process.

The appointment of two new board members followed a “lengthy and comprehensive search that began in April 2023,” Disney said Wednesday, adding that Gorman was integral to Morgan Stanley’s “well-managed succession process over the past year.” 

Peltz has criticized Disney for bungling its own CEO transition. Iger, 72, returned to run the company last November after the ouster of his successor, Bob Chapek.

The world’s largest entertainment company has been under pressure from investors to improve its performance following billions of dollars in losses at its streaming services and a string of disappointing movies from its film studio.

ValueAct Capital Management, another activist investor, has also built a stake in Disney, Bloomberg has reported.

Peltz first launched a proxy fight at Disney last year. He dropped those initial plans after Iger announced a massive cost-cutting program in February, that ultimately chopped 8,000 jobs and is expected to reduce annual expenses by $7.5 billion.

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