- Major Shareholder Sends Letter to Board
Outlining Case for Board Changes -
- Says Time Has Come to Refresh the Recipe by
Nominating a Highly-Qualified, Independent Slate of Directors to
Set a Strategy That Will Benefit All Shareholders -
Third Point (NYSE: TPRE; LSE: TPOU), a New York-based asset
manager with $18 billion of capital, has announced that it will
seek to replace the full Board at the Campbell Soup Company (NYSE:
CPB) at the Company’s Annual Meeting.
Additional information, including the Third Point slate of Board
nominees, can be found at www.RefreshCampbells.com. The text of
Third Point’s letter accompanying the Nomination Packet, addressed
to Campbell Board Chairman Les Vinney, is below.
September 7, 2018
Les VinneyChairman of the Board of DirectorsCampbell Soup
Company1 Campbell PlaceCamden, NJ 08103
Dear Mr. Vinney:
Enclosed with this letter is a nomination package pursuant to
which Third Point LLC, on behalf of funds it manages, nominates
twelve individuals (the “Shareholder
Slate”) to constitute a completely revamped board of
directors (“Board”) of Campbell Soup
Company (the “Company” or
“Campbell”).
In Third Point’s previous proxy contests, we have sought only a
few board seats to influence governance and implement change.
Unfortunately, this Board’s persistent failure to discharge its
fiduciary duties leaves us no choice but to seek to replace the
entire Board with our Shareholder Slate.
Today, the shares of Campbell trade at a price that is ~20%
lower than it was 20 years ago. The stock performance is a report
card on this Board’s tenure of mismanagement, waste, ill-conceived
strategy, and inept execution. On the Company’s earnings call last
month, Interim CEO Keith McLoughlin detailed the Board’s years of
failings with an extensive catalogue of the strategic and financial
blunders that brought the business to the brink.1 Absent from his
commentary, however, was any accountability for the damage. No
changes to the Company’s Board or senior leadership were announced,
making his contrite tone ring hollow.
The disappointing outcome of Campbell’s recent “strategic
review” process provides further evidence that this Board is unable
or unwilling to take the bold action needed to address the current
crisis and does not understand the depth of the Company’s problems.
Since 2016 alone, this Board has overseen over $7 billion of value
destruction. Years of poorly conceived and executed acquisitions
have over-levered the balance sheet, providing a limited range of
options to remedy the problems Campbell confronts today. The
Board’s shocking failure to have a CEO succession plan in place
following Denise Morrison’s sudden exit is a scathing indictment of
its inability to conduct one of any board of directors’ most
essential duties – to secure capable, continuous leadership for the
Company.
The Board’s recent conduct and aura of complacency makes no
sense from a strategic, operational, or financial perspective. We
can only conclude that the Board remains beholden to the
sentimental agenda of its vocal and empowered minority – the two
longstanding family representatives to the Board who have
stubbornly opposed options to create maximum value for all
shareholders for decades. At this point, it would be simply
reckless to leave the Board that caused this mess in charge of
fixing it. As the old maxim attributed to Albert Einstein says, “to
do the same thing over again and expect a different result is
insanity.”
Third Point’s proposed slate of directors brings sophisticated
expertise to oversee Campbell at this critical moment. As you will
note from the individual biographies included in the nomination
packet (and available on Third Point’s proxy website
www.RefreshCampbells.com), the Shareholder Slate has extensive
experience in operations, marketing, strategy, transactions,
leadership, capital allocation, and general corporate governance –
all of which the current Board lacks.2 Third Point brings a proven
record of driving successful turn-arounds by recruiting world-class
leadership talent and overseeing strategy and capital allocation,
leading to dramatic operational improvement and significant share
price appreciation. Third Point previously stated that a sale of
the Company was the only justifiable outcome of a strategic review,
which we believed was the case with the current Board and
leadership team in place. However, the Shareholder Slate, once
elected, will act consistently with its fiduciary duties in
pursuing optimal outcomes for shareholders and managing the Company
to enhance long-term value.
Despite the colossal failure of this Board and its handpicked
leaders, we believe Campbell has durable and iconic brands and many
fine employees who are as frustrated by the arrogance of its
leadership and failure to innovate as we are. You and the rest of
the Board are hereby put on notice that we expect you to conduct
yourself and the management of the Company in a manner that will
allow for the most seamless transition to the Shareholder Slate
promptly following the 2018 annual meeting. We are confident that
the time has come to #RefreshtheRecipe at Campbell with a new truly
independent shareholder-friendly slate of Directors and a fresh
vision for the Company.
Sincerely,
Daniel S. Loeb
Enclosures
About Third Point
Third Point LLC is an alternative investment firm managing
approximately $18 billion in assets for public institutions,
private entities and qualified individual clients. The firm was
founded in 1995 by Daniel S. Loeb, who serves as Chief Executive
Officer and oversees our investment activity. We employ an
opportunistic approach to invest globally in equity and credit
securities.
IMPORTANT INFORMATION
In connection with their intended solicitation for the 2018
annual meeting of stockholders of Campbell Soup Company, (the
“Company”), Third Point LLC and certain of its affiliates will file
a proxy statement with the U.S. Securities and Exchange Commission
(“SEC”) to solicit proxies from stockholders of the Company for use
at the Company’s 2018 annual meeting of stockholders. Third Point
LLC will furnish the definitive proxy statement to the stockholders
of the Company, together with a WHITE proxy card. THIRD POINT
STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Such proxy statement, when filed, and any
other relevant documents will be available at no charge on the
SEC’s website at http://www.sec.gov and will also be available,
without charge, on request from Third Point LLC’s proxy solicitor,
Okapi Partners LLC, at (855) 208-8902 or via email at
CPBinfo@okapipartners.com.
THIRD POINT PARTICIPANT INFORMATION
In accordance with Rule 14a-12(a)(1)(i) under the Securities
Exchange Act of 1934, as amended, the following persons are or may
be deemed to be, participants in the proxy solicitation: Third
Point, Daniel S. Loeb, Third Point Partners Qualified L.P., Third
Point Partners L.P., Third Point Offshore Master Fund L.P., Third
Point Ultra Master Fund L.P., Third Point Enhanced LP, Third Point
Advisors LLC, Third Point Advisors II LLC, Franci Blassberg,
Matthew Cohen, Sarah Hofstetter, Munib Islam, Lawrence Karlson,
Bozoma Saint John, Kurt Schmidt, Raymond Silcock, David Silverman,
Michael Silverstein, George Strawbridge, Jr. and William Toler.
Certain of the participants may be deemed to beneficially own
shares of capital stock of the Company described in Third Point
LLC’s statement on Schedule 13D initially filed with the SEC on
August 9, 2018 (the “Third Point Schedule 13D”) as it may be
amended from time to time, and George Strawbridge, Jr. may be
deemed to beneficially own shares of capital stock of the Company
described in his statement on Schedule 13D initially filed with the
SEC on August 9, 2018 as it may be amended from time to time. As
described in the Third Point Schedule 13D, Third Point and Daniel
S. Loeb beneficially own an aggregate of 17,000,000 shares of
capital stock of the Company (the “Third Point Shares”). Such Third
Point Shares consist of shares held by the following Third Point
investment funds: (i) 3,036,400 shares that are held by Third Point
Partners Qualified L.P., (ii) 341,200 shares that are held by Third
Point Partners L.P., (iii) 7,126,800 shares that are held by Third
Point Offshore Master Fund L.P., (iv) 3,828,400 shares that are
held by Third Point Ultra Master Fund L.P. and (v) 2,667,200 shares
that are held by Third Point Enhanced LP. Third Point Advisors LLC,
as the general partner of Third Point Enhanced LP, Third Point
Partners Qualified L.P. and Third Point Partners L.P., may be
deemed to beneficially own 6,044,800 of the Third Point Shares.
Third Point Advisors II LLC, as the general partner of Third Point
Offshore Master Fund L.P. and Third Point Ultra Master Fund L.P.
may be deemed to beneficially own 10,955,200 of the Third Point
Shares. As of the date hereof, Mr. Lawrence Karlson beneficially
owns 8,010 shares of capital stock of the Company; Mr. Michael
Silverstein beneficially owns 4,430 shares of capital stock of the
Company and Mr. William Toler beneficially owns 3,000 shares of
capital stock.
_________________
1 “Simply put, we lost focus. We lost focus strategically. We
had too many initiatives that made the company unnecessarily
complex. We were in the food business and the ag business. We had
growth businesses and we had cash businesses. We were focused on
startup businesses and venture capital investments. We aggressively
pursued the important consumer megatrend of health and well-being
without having clarity on our source of uniqueness or whether we
brought a competitive advantage to the space, and we depended too
much on M&A to shape our business strategy.
We lost focus within our products and brands. We did not manage
our portfolio in a differentiated manner. We pushed cash businesses
for growth and we underfunded growth businesses. Our resource and
capital allocation discipline was inadequate and we didn't properly
align our resources with our core business franchises where we have
strong market positions unique capabilities and the right to
win.
Lastly, we lost focus in process and execution. Our management
processes lack the necessary operating discipline. We created too
many silos throughout the company where decision rights were
unclear. We lacked agility and we're slow to react to customer
needs. And finally, we didn't have a culture of accountability,
which led to poor execution.”
Campbell’s Earnings Call, August 30, 2018.
http://investor.campbellsoupcompany.com/phoenix.zhtml?c=88650&p=irol-presentations
2 Third Point has no undisclosed financial arrangements with any
member of the Shareholder Slate in connection with such member's
role as nominee for the Board.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180907005172/en/
Press:Third Point LLCElissa Doyle, 917-748-8533Chief
Marketing Officeredoyle@thirdpoint.comorInvestors:Okapi
Partners LLCBruce H. Goldfarb/ Patrick J. McHugh, +1
212-297-0720CPBinfo@okapipartners.com
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