Dan Loeb is a man used to getting what he wants, or making those who stand in the way thereof regret it. So when he politely suggested that the members of the Campbell family owning a big chunk of the Campbell Soup Co. might want to stop doing that because they’re awful at it, he expected acquiesce. Not only did he not get that, Campbell’s went ahead and decided that rather than sell all of itself, it would sell a couple of bits of itself. This is precisely the kind of thing that makes Dan Loeb quite angry, and so it did, leaving him no choice but to demand the scalp of each and every person currently serving on the Campbell’s board. It also, alas, left him without much of a plan should he succeed.
Mr. Loeb nominated 12 new directors last week but is no longer pushing for a sale.
Private equity investors might in other circumstances have considered partnering with the founding family’s descendants, who own some 40 percent of the stock. But a deal to buy the pretzel company Snyder’s-Lance left Campbell with nearly $10 billion of debt — more than five times a forecast of its earnings before interest, tax, depreciation and amortization for the current financial year….
Kraft is one of few potential industry buyers. But Warren Buffett, chief executive of Berkshire Hathaway and Kraft’s largest shareholder, recently said it would be hard to justify a large premium.
That may mean Mr. Loeb — assuming he can win over enough insiders to seize control of the board — has to find his own recipe.
Third Point May Need a New Recipe for Its Campbell Soup Turnaround [Breakingviews via DealBook]