Activist investor Dan Loeb is agitating for sweeping changes at Disney, including a shake-up of its board, a spin-off of the sports television network ESPN and aggressive cost-cutting after rebuilding a stake in the entertainment and media group.

The head of the Third Point hedge fund also recommended that the company take full control of the streaming service Hulu by buying a minority stake from rival Comcast. Shares of Disney rose 2.8 per cent to $125 on Monday.

Disney’s “costs are among the highest in the industry,” Loeb wrote in a letter to Bob Chapek, the company’s chief executive, adding that “a strong case can be made that the ESPN business should be spun off to shareholders” to reduce Disney’s debt. ESPN broadcasts live sports in the US including games of the National Football League, National Basketball Association and Major League Baseball.