Campbell Soup and Third Point LLC settled their proxy contest on Monday by adding two of the hedge fund’s nominees to the U.S. food company’s board and giving the activist investor a say in selecting Campbell’s next CEO, the company said.
Campbell Soup will expand its board with the addition of Third Point nominees Sarah Hofstetter, who is president of Comscore, and Kurt Schmidt, a former chief executive of Blue Buffalo Company. By May 2019 another director will be added and Third Point will be consulted on the choice.
The hedge fund, which owns 7 percent of the company, will also be able to offer its views at two board meetings and two meetings with the chief executive officer in the next 12 months.
In return, Third Point promised not to run a proxy contest in the next year.
Campbell’s stock was off 2.9 percent at $39.36 in midday trading on the New York Stock Exchange.
The deal between the 149-year old food company and Loeb’s hedge fund, one of the world’s most closely watched activist hedge funds, ends an acrimonious U.S. boardroom battle days before an investor vote at Campbell’s annual meeting on Thursday. A number of heirs to the Campbell fortune, including three current board members, control roughly 41 percent of the company and made it increasingly difficult for Third Point to win the vote count, people familiar with the matter said.
“We are pleased to have reached an agreement with Third Point that is in the best interests of Campbell shareholders,” Campbell interim CEO Keith McLoughlin said in a statement.
Daniel Loeb, the billionaire investor who runs Third Point, said his firm “looks forward to working collaboratively with Campbell to improve value for all shareholders at this important time for the Company.”
Loeb initially asked other investors to help him oust the entire board, saying it was largely responsible for the company’s lagging share price and a fast-paced takeover spree that saddled it with a lot of debt. He pushed for a full sale of the company.
Campbell’s McLoughlin has said the company had lost focus but now has a strategic plan and is busy executing it, for example, by shopping its fresh foods business.
The company is still looking for a new chief executive and expects to name one before the end of the year. Third Point, which has been talking to a potential candidate, will be allowed to have input in the decision, the company said.
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