BOSTON, Oct 18 (Reuters) - Activist investor Daniel Loeb turned up the heat on Campbell Soup Co on Thursday with a video aimed at persuading retail investors to vote with his hedge fund Third Point LLC to replace the food company's entire board of directors.
The 3-minute, 57-second video makes many of the same points that Third Point has made in mailings and on its web site. But it uses the familiar Campbell Soup jingle and tailors its arguments to reach retail investors, often neglected in activist shareholder campaigns that mostly target pension funds and other institutional shareholders. (bit.ly/EmptyTheCan2018)
Retail investors make up between 10 percent and 15 percent of Campbell Soup's shareholder base and Loeb needs to persuade them if he is to win the hotly contested proxy fight. Third Point owns roughly 7 percent of Campbell shares and heirs of the company's founder who support the current board own 41 percent. Analysts have said every vote counts, making it important for Loeb to reach retail investors.
The video starts with Campbell's signature jingle "Mmm Mmm good" but then turns to "Mmm Mmm Bad" and chastises the board for the company's sluggish stock price and former Chief Executive Officer Denise Morrison's $60 million pay package. It argues that the board made bad business deals and failed to hold top leaders accountable.
On Wednesday, several heirs of the family that has controlled Campbell Soup for decades and who hold about 41 percent of the company's stock said they support the current board. They did not give an explicit reason for their support on the statement the company put out on Wednesday. Still, their stance could make it tough for Loeb to gain enough investor votes at the Nov. 29 annual meeting to unseat all 12 directors. George Strawbridge Jr., another family heir who owns a 2.7 percent stake, is siding with Third Point.
In the video, Third Point said fixing the company takes more than just adding some salt or gluten free noodles to the recipe. It calls for changing the board, "all of them," and says current directors destroyed shareholder value. It cited a statistic that one dollar invested in Campbell's 20 years ago would be worth $1.19 now while a dollar invested in the S&P 500 index would be worth $4.06. (Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)