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The third point wants Campbell to explore a division



The initial plan of Third Point LLC to renew

Campbell Soup
Co.

CPB 2.34%

It includes exploring a break-up of the company as one of its core principles, according to people familiar with the matter.

Daniel Loeb's activist hedge fund is waging a tough battle in a power struggle to replace Campbell's entire 12-person board. If he wins the advice, Third Point believes that the company must decide within 100 days if it is divided into two main units, one focused on food and beverages and the other focused on snacks, according to a presentation reviewed by The Wall Street Journal detailing the plans of the third point.

Third Point, which has said that the only justifiable option under the current board is a full sale of the company, believes that a division would make the company more attractive to investors and prospective buyers in the future, according to people familiar with the plans. . Earlier this month, he mentioned a division as one of the many ideas his board would consider.

Falling soup sales and failed expansions in snacks and fresh foods have affected Campbell's share price, which has fallen by approximately 22% this year. In August, he announced a plan to sell his fresh and international food units and focus on North America's meals, beverages and snacks. Acting CEO Keith McLoughlin, who replaced former executive director Denise Morrison after his abrupt departure in May, said the company had considered a range of options at that time including a full sale or a split in two.

Third Point also wants the company to focus on renewing its soup business, considering the sale of non-essential assets such as frozen cakes from Pepperidge Farm and buying smaller and healthier snack brands, according to plans.

Third People believes that Campbell is ignoring the potential to revive its soup business and believes that Campbell's soup business could benefit from adapting Conagra Brands Inc.'s frozen juice book, which involved the modernization of packaging, flavors and ingredients , people said.

People familiar with the company's plans say that frozen foods are not the same as soup and deny that their focus on soups has changed.

People said that Third Point supports the company's ongoing initiatives to reduce costs and optimize its snack distribution network, but believes they could perform better under new leadership.

Third Point and Campbell's heir, George Strawbridge Jr., have joined and own approximately 10% of Campbell's shares. They are compared to other Campbell heirs who own approximately 41% of the company, three of whom are current directors, and who plan to support the incumbent board of directors in a shareholder vote scheduled for November 29.

Campbell's president, Les Vinney, criticized Third Point last week for lacking a convincing plan or new ideas and said that the only goal of Third Point is to sell the company.

Campbell has said he plans to revitalize the company by investing revenue from planned sales to pay off the debt, which spiked after a recent acquisition of snack maker Lny, cut costs and improve operations. Campbell has also said he hopes to appoint a new CEO by the end of the year.

Third Point has said that the company should refrain from appointing a new CEO until after the vote. He notes in his presentation that one of his nominees, former CEO of Hostess Brands Inc., Bill Toler, is ready to replace Mr. McLoughlin as interim CEO.

Third Point sued Campbell and its board of directors on Friday, alleging that the food manufacturer distributed misleading and incomplete information to gain shareholder support in the power struggle. A judge in New Jersey is expected to issue a ruling on Friday on whether Third Point can move forward with the discovery.

Write to Lombardo face on cara.lombardo@wsj.com


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