Campbell Soup Co. and Third Point today (26 November) announced a deal that should bring the US food manufacturer respite from its critical activist investor.
The two sides, which have been locked in a war of words over the performance and strategy of the US food manufacturer, have come to an agreement over the make-up of the company’s board and its search for a new, permanent CEO.
Third Point has agreed to withdraw the slate of nominees it was to put up for election at Campbell’s annual shareholders’ meeting on Thursday.
The fund, run by billionaire and activist investor Daniel Loeb, will support Campbell’s slate of directors at the meeting and end its litigation against the soup maker.
In return, Campbell will increase the size of its board from 12 to 14 members and add two independent directors from Third Point’s proposed slate – Comscore president Sarah Hofstetter and Kurt Schmidt, a former Nestlé executive and the ex-CEO of US pet-food business Blue Buffalo.
Third Point is to also get input into Campbell’s ongoing search for a new CEO through Hofstetter and Schmidt being on the Lance crackers owner’s board.
Campbell has also invited Third Point, which has been disparaging of the manufacturer’s performance and its plans for improvement, to present its views at two board meetings and two meetings with its CEO within the next 12 months.
Third Point, which became a Campbell shareholder this summer, has agreed to a “12-month standstill and certain support commitments”, Campbell said.
In May, Campbell plans to add another director to its board and will consult with Third Point on that appointment.
“Third Point looks forward to working collaboratively with Campbell to improve value for all shareholders at this important time for the company,” Loeb said. “We are confident that Campbell will find a world-class CEO who is given the necessary support to execute on the strategy to strengthen the company, and that Sarah and Kurt will provide valuable perspectives to the Campbell board.”
Keith McLoughlin, Campbell’s interim president and CEO, took on the top job at the company after the departure of Denise Morrison in May. He has since led a strategic review of Campbell’s operations, the results of which had been met with criticism from Third Point.
He said the agreement with Third Point “is in the best interests of Campbell shareholders” and added: “We will continue to maintain an active and productive dialogue with all of our shareholders, including Third Point, as we execute our strategic plan and build a stronger and more focused company that creates long-term value for shareholders.”