Bid to shake up Campbell Soup gets a boost
CNN Business
By Danielle Wiener-Bronner
November 15, 2018
New York (CNN Business) The
activist investor trying to shake up Campbell Soup just got two important advocates on his side.
Daniel Loeb, a billionaire who has a history of taking
stakes in major companies and demanding change, has targeted the soup maker in his latest attempt to upend management at a major company.
His hedge fund,
Third Point, owns 7% of Campbell, and Loeb has been trying to rally support from other Campbells shareholders to change the companys leadership and install new directors.
Proxy adviser Institutional Shareholder Service, or ISS, lent support to Loebs hedge fund late Wednesday, saying that shareholders should vote for all
five of Third Points board nominees.
Glass Lewis, another important proxy adviser, lent support to three of the five.
Support from proxy advisory firms, third parties that advise investors on which side is best positioned to increase shareholder value, will likely help sway
some investors in Third Points favor. But its still an uphill battle for Loebs side.
Third Point and Campbell Soup (CPB) have been
locked in the vicious proxy battle since the summer.
Third Point started off by trying to replace the entire board, and argued that Campbells
leaders should sell the company.
It has softened its stance since then, and offered a plan to improve the health of the company and nominated fewer board
members. Campbell has held firm in its belief that it knows whats best for the struggling company.
This year, Campbell has suffered from poor
sales, an
ill-fated
acquisition and the abrupt departure of its CEO.
About 41% of the company is controlled by
descendants of the founding family, who have vowed to support the current leaders. Third Point and its supporters hold only about 10%. That means odds are against Third Point, which is making its case ahead of a shareholder vote during the
companys annual investor meeting on November 29.
Winning ISS approval is a big step for Mr. Loeb, said Charles Elson, director of
the center for corporate governance at the University of Delaware. That being said, he still has to overcome the hurdle of the family controlled shares.
ISS said that Campbell has lagged its peers in recent years, that it has failed to correctly manage its acquisitions and that the current leadership, while
acknowledging the companys shortcomings, has been too slow to make changes.