Campbell asks shareholders to stand with soup maker in fending off attack from activist investor Third Point

  • Campbell Soup sets Nov. 29 for a shareholder vote on the board as it battles a proxy war waged by activist fund Third Point.
  • Third Point earlier this year revealed a 5.65 percent stake in Campbell.
Cans of Campbell's Chicken Noodle Soup are seen in a supermarket in New York.
Richard Levine | Corbis News | Getty Images
Cans of Campbell's Chicken Noodle Soup are seen in a supermarket in New York.

Campbell Soup is asking shareholders to stand with the soup maker in a battle over its future as activist investor Third Point turns up pressure on the company to sell.

Dan Loeb's Third Point, which has a 5.65 percent stake in Campbell, announced its intention to try to replace the entire Campbell board earlier this year. Third Point is unhappy with Campbell's performance and claimed it didn't fully evaluate a potential sale as part of the company's three-month critical review.

The review was sparked by Campbell's disappointing earnings and surprise departure of CEO Denise Morrison. While Loeb has pushed for Campbell to sell itself as part of the review, Campbell announced in August that it plans to sell its international and fresh food businesses.

Those units have already seen interest from potential acquirers, The Wall Street Journal reported on Thursday.

Loeb is now trying to replace all 12 of Campbell's board directors at the company's Nov. 29 shareholder meeting. The company on Thursday reiterated its support for its own band of board nominees, which include three descendants of the company's founder: Archbold van Beuren, Bennett Dorrance and Mary Alice Malone. Dorrance and Malone together hold 33 percent of Campbell and have resisted past pressure to sell the company.

It also took aim at two of Third Point's nominees, both of whom were prior Campbell board members. One of them, George Strawbridge Jr. is a descendant of a founder. Strawbridge has disclosed a 2.7 percent stake in Campbell and has partnered with Third Point in its campaign.

"Despite criticisms of oversight at Campbell, Third Point nominated George Strawbridge, Jr., who retired from Campbell's Board at the age of 72 in 2009, with a tenure that spanned more than 22 years, and Lawrence Karlson, who served on the Board as recently as 2015 and supported many of the acquisitions that Third Point is now criticizing," the company said in the documents.

Of Third Point's campaign, Campbell said in its letter to shareholders the "New York-based hedge fund that only recently became a Campbell shareholder and held material short positions in Campbell stock for most of 2017, is attempting to deprive shareholders of the future value potential of Campbell by forcing a sale of your company while we are executing on our strategic plan to create value."

It added that the board "strongly objects to Third Point's aggressive and short-sighted tactics and urges shareholders to reject the hedge fund's misguided efforts and 'one-point' agenda for Campbell."

Third Point is also trying to get records from Campbell's board.

In a letter sent Wednesday to Campbell's corporate secretary, Third Point called the strategic review process a "sham," saying the company did not contact potential acquirers of "all or a meaningful portion of the company" and did not pursue a sale process.

"Shareholders plainly are entitled to records to determine why the company did not engage in a full and proper process — as they had publicly disclosed they would do."

Campbell, though, has previously said it has considered a sale and does not rule out the idea of one.

"In fact, all approaches presented by Third Point appear to be aimed exclusively at an eventual sale of the company — an alternative we evaluated and will continue to do so if it can be shown to drive value relative to the plans outlined in our strategy and portfolio review," the soup company said in its Thursday statement.

Loeb also chastised Campbell for a CEO search that not yet reached a conclusion months after announcing Morrison's departure.

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