Third Point – the New York-based activist investment group led by Dan Loeb, which has exerted intense pressure on Nestlé after taking a stake in the company last June – has increased its stake in Campbell Soup.
The firm now owns 5.65% of Campbell’s and is calling for a sale to remedy years of underperformance, amid rumours that Kraft Heinz might be interested in a buyout.
In July, Dan Neiweem, co-founder and principal of e-commerce specialist Avionos, told FoodBev that a merger between the two companies would “not be a bad thing”. But we’ve been led down this path before: a $143 billion play for Unilever failed spectacularly in 2017, and speculated bids for Kraft Heinz to buy Mondelēz, Archer Daniels Midland (ADM) and Danone failed to materialise.
Despite owning one of the industry’s most iconic brands and investing in growing companies like Pacific Foods, Campbell’s is only the world’s 48th largest packaged food and beverage business. In its most recent financial year, it returned revenue of $7.89 billion – $765 million higher than the previous year.
In a strongly worded statement, Third Point said its analysis on Campbell Soup “shows that years of abysmal oversight by the… board of directors permitted management missteps, dismal operating performance, and a series of ill-advised acquisitions to take an irreversible toll”.
It is not clear whether it is referring to Pacific Foods, Snyder’s-Lance, or Chef’d.
It is likely that Third Point will push for an effective permanent leader – such as chief operating officer Luca Mignini – to replace Denise Morrison as Campbell’s CEO.
Third Point indicated that Keith McLoughlin, who took over on an interim basis when Morrison retired, had said that “all options, including a sale, are being evaluated in the ongoing strategic review”.
Responding, a statement from Campbell’s read: “As previously announced on May 18, the company is currently undertaking a Board-led comprehensive strategy and portfolio review to examine all potential paths forward to maximise shareholder value. Our entire Board of Directors remains dedicated to delivering a go-forward strategy that will drive value for all shareholders. As we stated when we announced the review, we look forward to sharing the details of our plans when the company reports its fourth-quarter and full-year results on August 30 and engaging with our shareholders on our strategic plan.”
© FoodBev Media Ltd 2020
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