Third Point Has Built Campbell Soup Stake Worth More Than $300 Million
Third Point’s Loeb has spoken to interim Campbell CEO about strategy review
A variety of Campbell's soups in a grocery cart. Photo: Ross D. Franklin/Associated Press
Activist investor Third Point LLC has built a stake of more than $300 million in Campbell Soup Co. CPB -0.10% , according to a person familiar with the matter, adding to pressure on the soup maker as it seeks to turn around its business and reverse a sharp stock-price decline.
While it isn’t clear exactly how big the stake is, it amounts to more than 2.5% of Campbell’s stock. Third Point had filed for antitrust clearance, people familiar with the matter said, 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.
Third Point founder Daniel Loeb, who like other activists frequently pushes companies he invests in to sell all or part of themselves, has spoken with Campbell’s interim Chief Executive Keith McLoughlin about possible courses of action, the people said. It isn’t clear what Third Point’s plans for the stake are or whether it plans to go public with them.
Campbell said in a statement that it maintains an open dialogue with its shareholders.
The company expects to discuss the results of a strategic review of its businesses it is conducting in late August, around the time it is slated to report quarterly earnings.
The strategic review is being led by consultants at Deloitte LLP with help from deal-advisory firm Centerview Partners, one of the people said.
Campbell is at a pivotal moment in its 150-year history as its namesake canned soups and other heavily processed foods have fallen out of favor with consumers, and attempts to pivot to fresher offerings such as Bolthouse Farms juices have stumbled. Former Chief Executive Denise Morrison stepped down abruptly in May after a seven-year run and the company said it would review its product portfolio, which could involve selling or spinning off brands or divisions or distributing resources differently. Company officials have said all options are on the table, stoking speculation of a full sale to a rival or private-equity group.
Should it decide to sell itself, analysts and bankers have pointed to Kraft Heinz Co. as one potential suitor.
Crucial to the outcome of the strategic review is a group of insider shareholders, including the Campbell Trust and three descendants of the company’s founder who are also board members. Together this group owns about 42% of Campbell’s shares, according to FactSet. The three family members— Mary Alice Dorrance Malone, Bennett Dorrance and Archbold D. van Beuren —support the board-led strategic review and haven’t ruled out any option, including an outright sale, one of the people said. While Mr. Loeb reached out to family members, he has been speaking to management, this person said.
Shares of Campbell, which has a market value of around $12.3 billion, have slumped 23% over the past year. Growth in its core soup business fell in all but one of the past seven years and in the most recent quarter the company booked a sizable markdown of its fresh-foods business.
Third Point, which has about $18 billion of assets under management, often invests in what it considers undervalued companies on the verge of change. Campbell isn’t the first consumer company it has targeted. The hedge fund has criticized what it calls a “muddled strategic approach” at Nestlé SA and has been pressuring the food company to sell underperforming and unrelated businesses including a stake in L’Oréal SA . It is also known for waging successful campaigns at Yahoo Inc. and Sotheby’s.
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