Dan Loeb's Third Point extended an olive branch to Campbell Soup Co. Friday, scaling back the number of directors it will nominate to the company's board after hearing from investors who favor a settlement.
Loeb is now proposing five new directors after originally seeking to replace the soup maker's entire 12-member board. The activist fund had said a complete overhaul was needed and that Campbell should explore a sale. Loeb has since backed off from his demand for a sale and outlined a 100-day plan to turn around the company.
In a letter to the company's chairman Friday, Third Point said it scaled back the nominations after getting feedback from investors that -- while change was needed -- a settlement involving "meaningful representation" on the board from Third Point's slate would be in the best interest of both parties.
The activist fund, which holds a 7 percent stake in Campbell, said it will put forth its so-called "short slate" at the company's annual general meeting slated for Nov. 29.
Third Point's nominees include William Toler, the former CEO of Hostess Brands Inc.; Kurt Schmidt, former CEO of Blue Buffalo Pet Products Inc; Sarah Hofstetter, the president of Comscore Inc.; Bozoma Saint John, the CMO of Endeavor; and Munib Islam, a partner at Third Point. Toler is prepared to serve as interim CEO of Campbell, Third Point said.
"We have carefully selected the independent short slate to bring the experience and expertise that we think Campbell's board most needs to improve outcomes for shareholders," Third Point said in the letter, adding that it has been surprised by Campbell's "blanket dismissals" of its nominees.
"We suggest you take the time to do so to see for yourself why many shareholders believe they would be outstanding additions to the Campbell board," the firm said.
After Third Point announced its smaller slate, Campbell said it had proposed adding two people from Third Point's slate, Schmidt and Hofstetter, to its board after its annual meeting in late November. The soup maker said that idea was rejected by Third Point.
The move comes after Campbell said earlier this month that descendants of the company's founder planned to vote their entire stake in the company, about 41 percent of its outstanding common shares, for its incumbent directors. That creates a significant hurdle for Loeb to get his directors on the board.
The decision to scale back the slate comes as both sides prepare to present their cases to a group of shareholder advisory firms, which tend to look more favorably on activists seeking a minority amount of seats rather than those who are seeking to replace the entire board.
-- Bloomberg News