Key Takeaways
- • Campbell Soup agreed to add two Third Point-nominated directors immediately and a third by May 2019, expanding the board from 12 to 14 members and ending the proxy fight with activist hedge fund Third Point LLC.
- • Sarah Hofstetter (president of Comscore) and Kurt Schmidt (former CEO of Blue Buffalo Company) join the Campbell board, bringing external perspectives to the struggling soup manufacturer.
- • Third Point will be consulted on the selection of the third new director, giving the activist fund continued influence over board composition and strategic direction.
- • The settlement averts a proxy fight scheduled for Campbell's November 29 annual shareholder meeting, where Third Point had initially sought to replace the entire board following what founder Dan Loeb termed a "disappointing outcome" of the company's previous strategic initiatives.
- • This represents a significant victory for Third Point after an earlier agreement with D.E. Shaw expired, positioning the hedge fund to influence Campbell's CEO search and operational turnaround strategy.
Summary
Campbell Soup Company and Third Point LLC have reached a settlement agreement ending their proxy dispute, announced on November 26, 2018, just days before the company's annual shareholder meeting scheduled for November 29. Under the terms of the deal, Campbell will immediately add two board members nominated by Dan Loeb's Third Point: Sarah Hofstetter, president of Comscore, and Kurt Schmidt, former chief executive of Blue Buffalo Company. A third director will be added by May 2019, with Third Point having consultation rights over the selection.
The agreement expands Campbell's board from 12 to 14 members and effectively terminates the contentious proxy battle that had intensified in recent months. Third Point had launched an aggressive campaign to replace the entire Campbell board, citing what Loeb characterized as the "disappointing outcome" of the company's prior strategic decisions. The hedge fund's initial settlement with D.E. Shaw had expired on November 20, triggering renewed activism and the threat of a contested shareholder vote.
For Campbell, a company generating over $9 billion in annual revenue but struggling with modern consumer preferences in the packaged soup category, the settlement brings fresh board expertise in digital media and pet food operations. Hofstetter's background at Comscore provides digital marketing and analytics knowledge, while Schmidt's tenure leading Blue Buffalo reflects experience in the higher-growth pet nutrition space—a potential growth avenue for Campbell's diversified portfolio.
The settlement grants Third Point meaningful ongoing influence over board composition and strategic direction, particularly as Campbell searches for a new CEO. This outcome represents a tactical win for the activist fund and suggests that significant operational or leadership changes at Campbell may be forthcoming. The Dorrance family, which owns more than one-third of Campbell through approximately 87 family members, remains a substantial shareholder whose support was likely critical to facilitating this settlement.
The agreement expands Campbell's board from 12 to 14 members and effectively terminates the contentious proxy battle that had intensified in recent months. Third Point had launched an aggressive campaign to replace the entire Campbell board, citing what Loeb characterized as the "disappointing outcome" of the company's prior strategic decisions. The hedge fund's initial settlement with D.E. Shaw had expired on November 20, triggering renewed activism and the threat of a contested shareholder vote.
For Campbell, a company generating over $9 billion in annual revenue but struggling with modern consumer preferences in the packaged soup category, the settlement brings fresh board expertise in digital media and pet food operations. Hofstetter's background at Comscore provides digital marketing and analytics knowledge, while Schmidt's tenure leading Blue Buffalo reflects experience in the higher-growth pet nutrition space—a potential growth avenue for Campbell's diversified portfolio.
The settlement grants Third Point meaningful ongoing influence over board composition and strategic direction, particularly as Campbell searches for a new CEO. This outcome represents a tactical win for the activist fund and suggests that significant operational or leadership changes at Campbell may be forthcoming. The Dorrance family, which owns more than one-third of Campbell through approximately 87 family members, remains a substantial shareholder whose support was likely critical to facilitating this settlement.
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