Campbell Is Nearing Settlement With Activist Loeb
(Bloomberg) -- Campbell Soup Co. reached a settlement in its proxy battle with Dan Loeb, agreeing to give the activist investor two seats on the company’s board as well as a say in choosing a new chief executive officer.
The agreement allows Loeb’s Third Point to appoint independent directors Sarah Hofstetter and Kurt Schmidt to the board and expands the board’s size to 14 from 12. Third Point has agreed to a 12-month standstill and “certain support commitments” and to dismiss its litigation, Campbell said in a joint statement Monday.
“We are confident that Campbell will find a world-class CEO who is given the necessary support to execute on the strategy to strengthen the Company, and that Sarah and Kurt will provide valuable perspectives to the Campbell board,” Loeb said in the statement.
Campbell has also invited Third Point to present views at two board meetings and two meetings with Campbell’s CEO within the next 12 months, the company said.
A settlement, which comes before Campbell’s annual general meeting on Nov. 29, ends a months-long battle at the soup and snack maker. Loeb had originally called for an outright sale of the company, and aimed to replace its entire 12-member board before scaling back his demands and his slate of nominees to five.
While Loeb’s efforts for changes garnered the support of two prominent shareholder advisory firms, he faced an uphill battle with the descendants of the company’s founding family, who collectively own about 41 percent. They had said they planned to supported Campbell’s slate of directors, and the matter was headed toward a vote at the annual meeting on Nov. 29.
Campbell, based in Camden, New Jersey, is under pressure to prove it can ignite growth. The company has faced declining sales as consumers look for less-processed products, turning away from its namesake soup. Investors saw a glimmer of hope last week when Campbell reported “improved trends” for its soup business as it posted results that topped estimates.
Third Point and Campbell had taken steps this month to cool their battle after shareholders urged them to reach a settlement, with the company offering to appoint Hofstetter and Schmidt to the board.
Given the uncertainty of the proxy vote, the decision to grant Loeb a voice in the CEO search and the appointment of a third director likely helped the two parties reach an agreement. Campbell has been without a permanent CEO since the unexpected departure of Denise Morrison in May. The company’s management team expects to reach a decision by the end of the calendar year.
Third Point, which owns 7 percent of the company, had previously said a complete overhaul was needed at Campbell, and criticized the outcome of its recent strategic review, in which the company announced plans to sell its international and fresh food businesses. Loeb has since backed off from his demand for a total sale and has outlined a 100-day plan to turn around the company.
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