USA – Campbell Soup and activist investor Dan Loeb’s Third Point have announced that they have reached an agreement that will give the hedge fund two seats on the company’s board and a role in the company’s search for a new chief executive.
This will see Campbell increase its Board from 12 to 14 members and add two new, independent directors from
Campbell will increase the size of its Board from 12 to 14 members and add two new, independent directors from Third Point’s proposed slate: Sarah Hofstetter, President of Comscore, and Kurt Schmidt, former Director and CEO of Blue Buffalo Company, Ltd.
Third Point has in this regard agreed to withdraw its slate of director nominees and support the Company’s slate of directors at the upcoming Annual Meeting.
Also, Third Point will dismiss its litigation against Campbell and withdraw its books and records request.
“We are pleased to have reached an agreement with Third Point that is in the best interests of Campbell shareholders, and we look forward to welcoming both Sarah and Kurt to our Board of Directors,” said Keith McLoughlin, interim President and CEO of Campbell.
“We will continue to maintain an active and productive dialogue with all of our shareholders, including Third Point, as we execute our strategic plan and build a stronger and more focused company that creates long-term value for shareholders.”
The company also plans to add a third director to the board in May next year with Third Point’s consent.
Proxy fight
Campbell and Third Point have engaged in aggressive activist shareholder battles in recent years to the point that Loeb filed a lawsuit against the soup maker at one point.
Third Point which has about 7% stake in Campbell had been trying to put five nominees on the board, but Campbell has so far remained independent and granted only two of Third Point’s nominees seats on its board.
The tug of war between the two emanated soon after Campbell announced a strategic review and departure of its CEO after ‘unacceptable’ earnings results.
Dan Loeb’s Third Point had first pushed for a sale of the company and later a full ouster of its board.
This push and pull has been between descendants of Campbell’s founder who own at least 41% of the company and Third Point, who at one point partnered with George Strawbridge Jr., a descendant of soup company’s founder.
After failed ouster and popular sale campaign, Third Point ultimately moved from demanding a sale to saying it would accept other moves, including a split.
The new development and agreement comes after Campbell posted better than expected results in the first quarter, a 25% increase in net sales to US$2.69 billion even though its debt burden widened on Snyder’s Lance acquisition.
The company also announced plans to sell its international fresh food businesses, which posted an operating loss of US$3 million this past quarter.
