Billionaire Daniel Loeb, who owns Third Point, has stopped trying to persuade Walt Disney Co to spin off entertainment and sports network ESPN.
The activist says he now has a “better understanding” of its potential for growth.
Disney chief executive Bob Chapek insisted “ESPN is an asset that is well placed within the [company],” reaffirming its value.
Loeb tweeted that he is excited to see ESPN chairman James Pitaro deliver on the growth and innovation plans, “generating considerable synergies as part of” Disney.
In August, tech activist disclosed an approximately US$1bn stake in Disney and unveiled plans to make several changes, including an ESPN spin-off and adding board members.
Chapek confirmed Disney had received inquiries earlier in the year to buy ESPN on rumours it was considering offloading the company.
He also said it spent much of the last year trying to reignite ESPN’s growth to include it as part of its streaming service bundle.
"It's been a great cash flow generator for us, which, as we ramp up with streaming, kind of helps pay the bills," Chapek said, before adding: "It's very, very positive today, and the most important thing was to always look for the future, right?"
Third Point, which owns 0.4% of Disney, also suggested Disney speeds up the timetable for purchasing the remaining stake in streaming service Hulu ahead of the planned 2024.