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In recent years Campbell Soup Company has faced stagnant sales and consumer abandonment of canned soups that have been its staple product for generations.
Now he has to face an activist investor who wants to replace all of his board.
Third Point, the investment firm led by Daniel S. Loeb, appointed Friday Friday 12 candidates to the soup board to launch it into a sale. Among them is a member of Campbell's control family, who criticized the management of the company.
It is an aggressive move by one of Wall Street's most prominent hedge fund activists to force change in a company.
Activist investors, who publicly pressure companies to change their strategy, have taken power over the last decade and have reached ever-greater goals. Even big names such as Procter & Gamble, General Electric and Apple have found themselves in the crosshairs of these hedge funds.
But activists have rarely sought more than a few seats on a target's board in recent years. And companies have become more willing to give up a seat or two to avoid a deadly and expensive battle. Dispelling all the directors of a company is a much riskier gamble, because other investors can oppose such a radical overhaul.
Indeed, investors have decided to sweep the entire board of a company a few times in recent years. Darden Restaurants, the parent company of Olive Garden, is the most important example. The Starboard Value hedge fund successfully ousted the 12 directors.
During the two decades that he led Third Point, Mr. Loeb became one of Wall Street's best known activists. He has been in charge of Sony, Sotheby's and, more recently, Nestlé. Yet, even though he avoided campaigning for the full board, he merely looked for a few directors' seats.
The company so far has not considered his repeated calls to sell. Instead, in a plan unveiled last week, Campbell proposed to sell only its fresh food and international divisions.
Campbell's plan would essentially get rid of its historic strength in the packaged food sector, including the $ 1.55 billion acquisition of juice maker Bolthouse Farms, as consumer tastes shifted to cooler products. .
Campbell's decision was not favorable to Mr. Loeb, who said the company could get a premium from food companies that would pay for a well-known brand.
"Unfortunately, the persistent failure of this board to fulfill its fiduciary duties leaves us with no choice but to seek to replace the entire board with our shareholder list," wrote Friday the manager of the board. hedge funds.
He added that Campbell's decision to sell only some of its divisions "provides further evidence that this council is not able or unwilling to take the necessary steps to deal with the current crisis and does not understand the depth problems of society.
William D. Toler, former CEO of Hostess, is one of 12 candidates for the position of director; Kurt T. Schmidt, former General Manager of the Blue Buffalo Pet Food Company; and Bozoma Saint John, a former Apple executive who is currently marketing director of the talented Endeavor agency. Two third party executives are also among the nominees.
A notable candidate is George Strawbridge Jr., a descendant of John T. Dorrance, who invented condensed soup and ran the business a century ago. Strawbridge, who was previously a director at Campbell, partnered with Third Point to encourage the soup manufacturer to sell.
The fact that his relatives – who as a group own about 41% of Campbell – agrees is another problem, and winning them will be a critical task for Third Point and Strawbridge.
Other investors in the company seemed mixed about the prospects for successful proxy voting. Campbell's shares rose only slightly in mid-day on Friday to $ 40.26.
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