Third Point video urges retail investors to replace Campbell Soup board

By Svea Herbst-Bayliss

BOSTON (Reuters) - Activist investor Daniel Loeb turned up the heat on Campbell Soup Co on Thursday with a video aimed at persuading retail investors to vote with his hedge fund Third Point LLC to replace the food company's entire board of directors.

The 3-minute, 57-second video presents many of the same points Third Point has made in mailings and on its website. It uses the familiar Campbell Soup jingle and tailors its arguments to reach retail investors, often neglected in activist shareholder campaigns that mostly target institutional shareholders. (http://bit.ly/EmptyTheCan2018)

Retail investors make up between 10 percent and 15 percent of Campbell Soup's shareholder base and Loeb needs to persuade them to win the hotly contested proxy fight. Third Point owns a roughly 7 percent stake and heirs of the company's founder who support the current board own 41 percent. Analysts have said every vote counts, making it important for Loeb to reach retail investors.

The video starts with Campbell's signature jingle "Mmm Mmm good," but then turns to "Bad" and chastises the board for the company's sluggish stock price and former Chief Executive Officer Denise Morrison's $60 million pay package. It argues that the board made bad business deals and failed to hold top leaders accountable.

Campbell said it has taken "swift action" and changed senior management, launched a now-completed strategic review and laid out a plan to spin off some businesses and cut costs.

"We are focused on the core issues at hand," the company said, adding that Third Point's video lays out no plan and that the hedge fund is "attempting to mislead Campbell shareholders."

On Wednesday, several heirs of the family that has controlled Campbell Soup for decades, threw their weight behind the current board. Their stance could make it tough for Loeb to win enough investor votes at the Nov. 29 annual meeting to unseat all 12 directors. George Strawbridge Jr., another heir who owns a 2.7 percent stake, is siding with Loeb.

In the video, Third Point said fixing the company takes more than just adding some salt or gluten-free noodles. It calls for changing the board, "all of them," and says current directors have destroyed shareholder value. It cited a statistic that claimed one dollar invested in Campbell 20 years ago would be worth $1.19 now while a dollar invested in the S&P 500 index would be worth $4.06.

Campbell stock rose 1.5 percent to $36.88.

(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio and Jeffrey Benkoe)