Why Campbell Soup might go up for sale

Campbell Soup's stock has passed its expiration date.Shares are down 20% in the past year, which may ...

Posted: Aug 2, 2018 4:56 AM
Updated: Aug 2, 2018 4:56 AM

Campbell Soup's stock has passed its expiration date.

Shares are down 20% in the past year, which may be why activist investor Dan Loeb is reportedly looking to spice things up.

The Wall Street Journal reported late Tuesday that Loeb's investment firm, Third Point LLC, now has a more than $300 million stake in Campbell Soup. Shares of Campbell Soup rose 2% on the report.

Separately, The New York Post reported Loeb has hired an investment banker and is pressuring the company and its top investors to put Campbell Soup up for sale.

Third Point declined to comment about the reports.

A spokesperson for Campbell Soup said the company doesn't comment on rumors or speculation, but added that "we maintain an open, engaged dialogue with all of our shareholders, and welcome all investments in our company."

The company announced in May that it would conduct an operational review of its business. The review is expected to end in late August.

So it's still possible that the board will recommend a sale of Campbell Soup. And that could make sense given the turmoil in the executive suite.

CEO Denise Morrison, who had been atop Campbell Soup since 2011, abruptly announced her retirement in May after the acquisition of snack maker Snyder's-Lance. Campbell Soup paid $6 billion for the company, but the integration didn't go smoothly, according to reports.

Keith McLoughlin, the former head of appliance maker Electrolux and a board member at Campbell Soup, was named interim CEO

Related: Campbell Soup Denise Morrison leaves the company

The WSJ said in its report Tuesday that Loeb has been talking to McLoughlin about a strategic review because of poor earnings.

Soup sales have slumped lately too. And a push into fresh and organic food hasn't panned out as well as hoped.

But if Loeb wants Campbell Soup to put itself on the shopping block, he must convince family ownership that it's a good idea. Three descendants of condensed soup maker John Torrance collectively own about 42% of its shares.

Those shareholders may be amenable to the idea of a deal though. After all, the packaged food industry has played host to a flurry of mergers recently. Companies are trying to get bigger in an attempt to have more pricing power.

Many food makers have been hurt by deflation in the grocery industry. Intense competition between Whole Foods owner Amazon, Walmart, Costco and supermarket king Kroger have led to a drop in prices for a lot of food items.

Related: Campbell Soup is piping hot after reported M&A interest

That's great news for consumers, but it's terrible for the food companies and their investors.

And while many of the food deals have been smaller acquisitions for niche companies, ConAgra recently announced plans to buy Birds Eye maker Pinnacle Foods for nearly $11 billion. Campbell Soup is worth about $12.5 billion.

Kraft Heinz -- backed by Warren Buffett -- as well as cereal giant General Mills have been reported to have interest in a deal for Campbell Soup.

Huntsville
Broken Clouds
66° wxIcon
Hi: 82° Lo: 62°
Feels Like: 66°
Florence
Scattered Clouds
65° wxIcon
Hi: 82° Lo: 63°
Feels Like: 65°
Fayetteville
Broken Clouds
64° wxIcon
Hi: 80° Lo: 62°
Feels Like: 64°
Decatur
Clear
66° wxIcon
Hi: 81° Lo: 62°
Feels Like: 66°
Scottsboro
Overcast
68° wxIcon
Hi: 80° Lo: 63°
Feels Like: 68°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 16530

Reported Deaths: 591
CountyConfirmedDeaths
Mobile2124112
Jefferson1712100
Montgomery154134
Tuscaloosa67813
Marshall6689
Lee53332
Franklin5147
Shelby48419
Tallapoosa41864
Butler39213
Chambers34924
Madison3184
Elmore3137
Walker2991
Baldwin2819
Etowah24411
Dallas2443
DeKalb2413
Morgan2311
Coffee2241
Lowndes22210
Sumter2136
Autauga2053
Houston1884
Bullock1833
Pike1790
Colbert1612
Russell1590
Marengo1556
Lauderdale1532
Calhoun1523
Hale1517
Choctaw1488
Wilcox1347
Barbour1321
Clarke1292
Randolph1257
Marion11911
St. Clair1161
Pickens1014
Talladega1003
Dale990
Chilton971
Cullman960
Greene924
Limestone870
Winston820
Covington771
Jackson752
Crenshaw722
Bibb711
Henry712
Macon712
Washington666
Blount581
Escambia493
Lawrence460
Geneva400
Conecuh351
Coosa351
Monroe352
Perry350
Cherokee342
Clay272
Lamar210
Fayette130
Cleburne131
Unassigned00

Tennessee Coronavirus Cases

Confirmed Cases: 21679

Reported Deaths: 356
CountyConfirmedDeaths
Davidson489460
Shelby4718107
Trousdale13934
Rutherford111622
Sumner85245
Hamilton71915
Bledsoe6081
Williamson53310
Putnam4615
Robertson4412
Tipton4303
Lake4130
Wilson3878
Out of TN3794
Knox3575
Bedford2744
Montgomery2613
Rhea1980
Hardeman1940
Madison1752
Loudon1370
McMinn13614
Macon1243
Cheatham1180
Cumberland1111
Dickson1100
Fayette1102
Bradley1081
Blount893
Maury810
Sevier762
Washington750
Coffee680
Unassigned670
Wayne630
Gibson611
Monroe612
Sullivan602
Hickman570
Lauderdale561
Dyer500
Franklin491
Greene482
Anderson391
Marion381
DeKalb370
Grundy321
Hawkins312
Haywood302
Smith301
Hamblen302
Henry300
Marshall301
White300
Obion281
Jefferson280
Carroll271
Meigs260
Overton260
Weakley260
Lincoln250
Lawrence240
Warren220
Cocke200
Carter191
Jackson170
Morgan170
Cannon170
Campbell171
Roane160
Crockett162
Perry160
Johnson160
Polk150
Sequatchie150
Henderson140
Humphreys131
Chester120
Fentress120
Giles120
McNairy120
Scott110
Stewart110
Hardin112
Claiborne90
Houston80
Benton71
Grainger60
Clay60
Decatur50
Van Buren40
Union40
Unicoi40
Moore30
Pickett30
Lewis30
Hancock10

 

 

Community Events