An increasingly ugly fight for control of Campbell Soup plays in courtroom and boardroom. The efforts are high: The outcome…
An increasingly ugly fight for control of Campbell Soup plays in courtroom and boardroom.
The efforts are high: The outcome will determine the future of the 149-year-old American company and its iconic brands.  On the one hand, activist is investor Daniel Loeb. On the other hand, it is the current board. Both have mentioned support from members of the company’s founder and both say they know what’s best for Campbell Soup (CPB), which has faced a lot of problems, including poor sales, abusive acquisitions and the abrupt retirement of their CEO’s year.
Loeb wants the current leadership, but Campbell says Loeb is inexperienced in the world of fungus and that they know how to turn things around.
The game has been raging for several months. But it was heated when Loeb’s hedge fund Third Point, LLC sued the mushroom company on Thursday and claimed that Campbell’s board members are misleading shareholders. Campbell said it is “opposed to the trial”.
It’s not uncommon for proxy battles to be so intense.
“Proxy battles are notoriously unpleasant on both sides,” said Charles Elson, Head of Corporate Governance at Delaware University. He added that trials are not uncommon. “Accusations, litigation, everything happens.”
The battle began seriously in September when Loeb proposed replacing the entire Campbell Board.
In a letter to the Chairman of the Board, he blamed the company for the problems and accused members of “misconduct, waste, malicious strategy and unambiguous execution”.
Loeb’s letter came to answer a business plan that was not available for his wish for full sales. In August, the company said it was selling Campbell Fresh, which includes Bolthouse Farms juice and Campbell’s own chilled soups and its international business. After several years of overtaking, it said that it will focus instead on strengthening its most popular brands and that it has not ruled out a sale.
Since then, both sides have built up their cases before the Annual General Meeting scheduled for November 29th.
In Thursday’s trial, Third Point claimed that Campbell deceived the shareholders when asked them for power of attorney without giving details of the strategic review. The third point also considered that the respondents engaged in a deliberate campaign with incorrect data aimed at securing their re-election through a misinformed poll on elections. “It’s demanding Campbell claims that the new Board members recommended by Third Point do not have the right experience for the job, that the hedge fund has a superficial understanding of the company and has failed to present a convincing argument. The company repeated these points and confidence in its own plan to move forward in a letter to the shareholders on Thursday.
“We are convinced of the new strategic direction,” wrote Independent Chairman, Les C. Vinney, “and strongly believes that our plan to improve the company’s focus and economic Results are the best way forward. “He added that he has the support of the family members on the board.
In this case, the odds are against the third point. Accordingly, about 41
% of the company is reported, according to Refinitv data.” There is a huge amount of overcoming ” said Elson. Third place holds about 7% and shareholder and descendant George Strawbridge Jr. controls almost 3% for almost 10%, according to Refinitiv.
Hedge fund may be fishing to reach agreement before voting, says Jian Huang , a deputy professor at the Department of Finance at Towson University.
“I do not see that the third point will win this match,” he said. “But they probably have two or three star seats out of it.”
Some board of directors could help, he noted about Third Point’s final goal is to convince the board members to get Campbell on sale.