It appears that asset sales, cost-cutting, and restructuring is on the menu at the iconic Camden, New Jersey-based Campbell’s if New York City, New York-based hedge fund Third Point wins a proxy fight to replace the entire board of directors. Third Point’s activism is well-known and it appears that Third Point has also taken a major position in Nestlé which it believes is poorly managed and in need of drastic restructuring.
According to published reports, Third Point’s original intent was to arrange the sale of the entire company to maximize shareholder return on investment.
In response to activist pressures, Campbell’s has undertaken a “strategic review,” and has suggested that its desire is “to optimize its current portfolio, divest certain businesses and pay down debt, while also working to reduce costs.”
Campbell’s interim President and CEO Keith McLoughlin said, “Campbell’s Board of Directors considered a full slate of strategic options, including optimizing the portfolio, divesting businesses, splitting the company, and pursuing a sale. The Board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model. Importantly, the Board remains open and committed to evaluating all strategic options to enhance value in the future. The entire statement can be found here.
Standard corporate-speak for trying anything to boost share prices and leave the existing board and management intact.
There is little or no doubt that change is arriving at Campbell’s and that employees should take note.
Do you wonder, Am I Next?