Third Point Scales Back Its Demand for Campbell Board Seats

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Daniel Loeb’s hedge fund Third Point holds about 7% of Campbell Soup stock.

Daniel Loeb’s hedge fund Third Point holds about 7% of Campbell Soup stock.


Photo:

David Paul Morris/Bloomberg News

Daniel Loeb’s Third Point LLC backed off a bid to replace

Campbell Soup
Co.’s


CPB 2.02%

entire 12-person board after the hedge fund rejected a settlement offer from the company for two seats.

Third Point, locked in a high-profile proxy battle with the soup maker, cut the size of its board slate to five nominees from 12, as the hedge fund looks to boost its chances of gaining influence over the company.

Third Point said in a letter sent to Campbell Chairman Les Vinney on Friday that it has heard from shareholders that they would like to see a settlement in which some of Third Point’s nominees join the current board.

Later Friday, Campbell said in a letter to shareholders that Third Point’s change comes after it rejected an offer for two of its nominees to join the board.

Campbell had offered former Blue Buffalo CEO Kurt Schmidt and comScore Inc. President Sarah Hofstetter to join its board after the Nov. 29 annual meeting, which would have expanded its size to 14, the company said. Campbell also said it made clear to Third Point in recent weeks that it wouldn’t consider adding a Third Point employee to its board, given potential conflicts of interest.

Third Point’s reduced slate includes Ms. Hofstetter, Mr. Schmidt, Third Point partner Munib Islam, former Uber Technologies Inc. executive Bozoma Saint John and former Hostess Brands Inc. CEO William Toler.

The Third Point nominees who were removed include George Strawbridge Jr., the Campbell heir with whom the hedge fund is working, and Third Point managing director Matthew Cohen.

It can be easier for an activist investor who isn’t seeking a majority of board seats to gain support from proxy advisers such as Institutional Shareholder Services, which is expected to weigh in on the contest before the Nov. 29 vote. Proxy advisers can influence the way some big institutional shareholders vote.

Third Point, which has criticized Campbell’s board for failing to buoy a slumping stock price, originally called for a sale of the company but has since said all options would be back on the table under new leadership. Campbell announced a plan in August to sell its international and fresh-food units and focus on North American meals, snacks and beverages.

Third Point holds about 7% of Campbell stock, and Mr. Strawbridge holds around 3%.

Four other Campbell heirs who say they control about 41% of the company’s stock have said they plan to support the current board; three of those heirs are on the board.

Shares of Campbell were up 2% Friday afternoon.

Write to Cara Lombardo at cara.lombardo@wsj.com