Categories Analysis, Retail, U.S. Markets News

Recovery hopes brighten as Campbell Soup nears deal with Third Point

The future of Campbell Soup Company (CPB) has been hanging in the balance for several months now amidst pressure from activist investors – worried about the food company’s dismal financial performance and mounting debt – to restructure the business. Though the call to sell the company gathered momentum after its poor performance in the June quarter, the latest developments indicate the stakeholders are pursuing more moderate options to salvage the struggling soup maker.

New York-based hedge fund Third Point (TPRE), which owns about 7% stake in Campbell, seems to have softened its stance after the latter improved its financial performance in the most recent quarter. According to media reports, the companies have moved closer to a settlement on adding the nominees of Third Point to Campbell’s board.

In what could be the beginning of a major shift in the business strategy of Campbell, which is currently run by a family that owns the majority stake, the two parties reportedly agreed to include two nominees of Third Point in the former’s board. Since the matter is yet to be confirmed, the terms are subject to change until a final settlement is reached, which is likely to coincide with Campbell’s shareholder meeting scheduled to be held Thursday.

According to media reports, the companies have moved closer to a settlement on adding the nominees of Third Point to Campbell’s board

It is learned that Kurt Schmidt, former CEO of Blue Buffalo Co., and Sarah Hofstetter, president of Comscore Inc., are the activist fund’s nominees to be added to the board. The bleak prospects of securing an appropriate buyer for Campbell could be the reason behind Third Point freezing its aggressive proposals, including the sale of the company and replacement of all of its board members.

Campbell Soup’s stock climbs after Q1 results beat estimates

Maintaining the uptrend that followed last week’s impressive earnings report, Campbell’s shares closed the last trading session up 2.5%. A positive change in the decision-making process at the top level could bring long-term benefits to shareholders, considering the below-average return being delivered by the company currently.

Plagued by mismanagement and financial indiscipline, Campbell badly needs a comprehensive overhaul to get back on track. Ironically, the company which drew criticism for its multi-billion dollar buyout of snack maker Snyder’s-Lance earlier this year is selling its fresh food business after efforts to revive the loss-making segment failed.

 

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

Should investors worry about Micron’s (MU) weak Q4 results and guidance?

The semiconductor industry is a rapidly growing business segment that currently thrives on the digital transformation wave. The demand for memory chips and other semiconductor products increased over the years,

What has Bed Bath & Beyond (BBBY) outlined for this fiscal year?

Shares of Bed Bath & Beyond (NASDAQ: BBBY) were up on Friday, a day after the company delivered disappointing results for the second quarter of 2022. The company reported a

NKE Earnings: Highlights of Nike’s Q1 2023 results

Nike, Inc. (NYSE: NKE) has reported a decrease in net profit for the first quarter of 2023, despite a modest increase in revenues. The company's stock suffered a big loss

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top