(Reuters) - Billionaire Nelson Peltz's Trian Fund Management criticized Walt Disney (NYSE:DIS)'s investment plans, calling it a "spaghetti against the wall plan", in a letter sent to the entertainment and media giant's shareholders on Monday.
The home of Mickey Mouse is in a proxy battle with Peltz who has pushed the company to cut costs, create Netflix-like profit for its streaming business and clean up its succession planning.
CEO Bob Iger had announced a $1.5 billion stake in "Fortnite" maker Epic Games and plans to launch a flagship ESPN sports streaming service.
The activist investor-led fund remained unimpressed and said in the letter the company "appears to again be trying to distract shareholders with what we see as a fanciful tale, claiming it has turned the corner and entered a new era".
The plans for a sports streaming venture would create confusion among Disney's customers and compete with its own services, Trian said, adding that the investment in Epic games lacked a clear product roadmap.
Trian had made a regulatory filing on Jan. 31 in which it said shareholders should replace Disney directors Michael Froman and Maria Elena Lagomasino with Peltz and former Disney chief financial officer Jay Rasulo.
"Disney shareholders need the company to consistently perform under the watchful eye of a vigilant Board. That is the recipe for good eating," Trian said.
Disney has set a shareholder meeting for April 3 for when investors will get to decide on who will guide the company's future.