July 31, 2018 / 10:58 PM / 20 days ago

UPDATE 1-Third Point seeks allies to put pressure on Campbell Soup -sources

(Adds Campbell Soup statement)

By Greg Roumeliotis and Svea Herbst-Bayliss

July 31 (Reuters) - Activist hedge fund Third Point LLC is meeting with some of Campbell Soup Co's largest shareholders to seek support for changes at the U.S. consumer company, people familiar with the matter said on Tuesday.

The meetings come after Campbell Soup Chief Executive Denise Morrison unexpectedly stepped down in May, after the company issued a bleak forecast for the year and said it would embark on a review of its many brands.

Third Point, which has a sizeable stake in Campbell Soup, is hoping to win enough support from the family clans that collectively own 41 percent of the company to call for its sale or a major break-up, the sources said.

It is not clear whether Third Point will win enough support, and the hedge fund may choose not to make any public demands, the sources added, asking not to be identified because the matter is confidential.

"Campbell does not comment on rumors or speculation around the trading activity within our stock," Campbell Soup said in a statement.

"We maintain an open, engaged dialogue with all of our shareholders, and welcome all investments in our company. The company, along with its outside advisors, is currently undertaking a Board-led comprehensive strategic and operational review of the business, including the composition of its entire portfolio, to examine all potential paths forward to maximize shareholder value," the company said.

Third Point declined to comment.

The New York Post first reported earlier this month that Third Point was targeting the company and was in talks with family members.

The descendants of former Campbell Soup Chairman John Dorrance own big stakes in the company: Mary Malone owns 17.72 percent, Bennett Dorrance has 15.41 percent, and Archie van Beuren 8.59 percent. They have traditionally been attached to the company and resisted a sale.

Food companies like Campbell have been pressured as consumers increasingly move away from processed food toward healthier options. Shifting consumer tastes are partly to blame for four straight years of declines at Campbell's U.S. soup business, a period that Morrison oversaw.

Campbell in 2015 reorganized into three divisions, creating the Campbell Fresh unit after combining what was a Packaged Fresh division with soups sold to supermarket delis. But Campbell Fresh struggled, resulting in a two-year decline in organic sales.

Campbell expects to discuss the outcome of its strategic review when it reports fourth-quarter results in late August, the company has said. Analysts have said that the most logical path for the company may be to separate its profitable but debt-laden snack business from its slower-growing soup business.

Third Point, a $18 billion hedge fund run by billionaire Daniel Loeb, has made a number of investments in food-related companies over the years. Most recently, it has called for Nestle SA to shake up its business. (Reporting by Greg Roumeliotis in New York and Svea Herbst-Bayliss in Boston; Editing by Richard Chang)

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