We invested in Campbell in the Second Quarter of 2018. The company was at a crossroads. Earnings were going the wrong way, the balance sheet was over-levered, and Campbell’s (NYSE:CPB) long-time CEO had just left, with no successor in place. It was clear to us that the company’s problems were fixable, but only with real change at the board and management level.
We fought a proxy war to help effect that change and agreed to a settlement in November that should set the stage for Campbell’s turnaround. The terms of our settlement included a mix of board representation (two directors now and one mutually agreeable director later) and formal outside-in engagement (input on the CEO and regular access to the board and C-suite).
Once the proxy contest ended, the dynamic between Third Point and the company changed immediately, and we got to work. Within days, two Third Point director nominees, Sarah Hofstetter and Kurt Schmidt, were added to the board. Sarah has critical marketing experience and Kurt brings a wealth of packaged food operational expertise to the Board.
We also worked cooperatively with Campbell to help recruit Mark Clouse as its new Chief Executive Officer. Mark is a seasoned packaged food executive and brings the right set of skills to lead the company at this critical time. He started at Campbell on January 22, and we are excited to work with him and the company’s board to repair the balance sheet, execute an operational turnaround of the business, and explore all options to create long-term value for shareholders. With Mark at the helm and change at the board level following years of underperformance, we are confident Campbell has a good long-term case for value creation.
From Daniel Loeb (Trades, Portfolio)'s fourth-quarter 2018 Third Point shareholder letter.
