Loeb and Third Point Buy a Stake in Campbell Soup

By Dave Fusaro, Editor in Chief

Aug 01, 2018

Campbell Soup Co. appears up to its ears in investor turmoil. The latest: Activist investor Daniel Loeb and his Third Point LLC investment fund apparently have amassed a stake of more than $300 million in the company, according to the Wall Street Journal.

That comes atop a strategic review of the company, rumors of unsolicited buyout offers and at least one other investment firm looking for a quick return on investment.

Campbell sales and profits have been flat for some time. 2017 sales continued a three-year decline, to $7.89 billion, although net earnings perked up to $887 million, the highest amount in at least five years. Such pressures undoubtedly were behind CEO Denise Morrison's abrupt retirement on May 18.

Morrison hasn't been permanently replaced, although a director of two years, Keith McLoughlin, was named interim CEO as an executive search got under way.

The stock hit an eight-year low of $33.19 on June 6, although it's sprung back up above $40, largely on speculation that something big is about to happen.

Third Point is known for making things happen. The Journal could not pinpoint the investment fund's stake, although the newspaper estimated it at more than 2.5% of Campbell’s stock. Third Point filed for antitrust clearance, "people familiar with the matter" told the Journal, which is necessary if the firm wants to increase its stake and get involved with business decisions at Campbell. A 30-day waiting period ended earlier this week without the government objecting.

Also in the soup:

  • Campbell acknowledged on July 16 it received notice of an unsolicited “mini-tender” offer by Ponos Capital LLC to purchase up to 5,952,381 shares of Campbell capital stock, about 2 percent of the common shares outstanding, at a price of $42 per share in cash. Campbell recommended to its shareholders not to take the offer from Ponos.
  • While the company said during Morrison's departure that it would undertake a strategic review of its businesses and consider all possibilities, the company now notes that review will be led by consultants at Deloitte LLP with help from deal-advisory firm Centerview Partners.
  • Reports keep mentioning Kraft Heinz as suitor.

The Journal also noted that a group of insider shareholders, "including the Campbell Trust and three descendants of the company’s founder who are also board members," controls about 42% of Campbell’s shares.

Last month we reported Loeb and Third Point's $3 billion investment in Nestlé SA, which the hedge fund has called underperforming.

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