Dan Loeb’s October Was Pretty Bad All Around

He’s hoping November will be better, but probably not.
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Dan Loeb’s battle for control over Campbell Soup Co. has already featured some potshots at elderly canned food heirs, an amazing and amazingly hokey video assault on those heirs and the board members they back, and a lawsuit accusing the company of lying to shareholders about one of those heir-directors. But in the last few days, the Third Point chief’s gotten a little more frenetic. In the face of almost impossible odds, he rolled out a 100-day plan to cleave Campbell in twain to squeeze some salty, preservative-filled shareholder value out of the place, a plan Campbell said was straight-up plagiarism, although there plan curiously does not call for a Solomonic solution to its problems. Perhaps there’s a reason for Loeb’s new sense of urgency?

The Third Point Offshore Fund dropped 6.9 percent last month, bringing its loss this year to 6.3 percent, according to an investor letter seen by Bloomberg News. The firm’s Third Point Partners LP fund also fell by a similar magnitude, bringing its loss for the year to 5.9 percent.

Now, Loeb’s not likely to get Camp and Bell, or even a single one of those 12 board seats, at the company’s annual meeting at the end of the month, which annual meeting Loeb would like to postpone for a while. Even so, Loeb’s gonna be fine, both because the aged men and women who control Campbell will likely take a hint or two from his interest, and because, well, yea, there are a lot of things in common between the Third Point plan and the family plan.

He believes that Campbell’s stock could be worth $70 a share by 2022 if he can overhaul the board and implement other changes.… Nearly half of that increase would come from achieving cost savings from deals that had previously been announced. In fact, if the company simply met its expected cost-cutting targets and did nothing else, using Loeb’s assumptions of net debt and his suggested 12 times earnings multiple to derive the company’s enterprise value, the shares that currently trade at around $38 would be worth over $62 apiece by 2022, or nearly $46 in today’s money.

Dan Loeb’s Third Point Funds Slump in October as Markets Tumble [Bloomberg]
Dan Loeb’s Win-Win Situation With Campbell Soup [Breakingviews via DealBook]
What Campbell Can Learn from Third Point [WSJ]
Third Point Wants Campbell to Explore a Split [WSJ]
Third Point, Campbell spar over plans for company’s future [Reuters]

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