(Reuters) – Campbell Soup Co (CPB.N) said on Thursday it would sell its international businesses and fresh refrigerated-foods unit, following a months-long strategic review and pressure from hedge fund investors to sell the whole company.
The board kept alive the possibility of an outright sale, saying it “remains open and committed to evaluating all strategic options to enhance value in the future.”
It is not clear if the plan will appease activist investor Dan Loeb, whose Third Point LLC hedge fund announced a 5.65 percent stake on Aug. 9 and immediately pressed for a sale of the entire company to a competitor as “the only justifiable outcome.”
Shares of the 149-year-old company fell 4 percent in pre-market trading.
The company has hired Goldman Sachs Group Inc (GS.N) and Centerview Partners to sell the units.
The two businesses currently bring in about $2.1 billion in annual sales, about a quarter of Campbell’s overall revenue.
Campbell International includes Australian biscuits brand Arnott’s and the Kelsen Group, along with the company’s manufacturing operations in Indonesia and Malaysia and its businesses in Hong Kong and Japan.
Campbell Fresh includes Bolthouse Farms, Garden Fresh Gourmet and the company’s refrigerated soup business.
The planned sales mark a change from the strategy of former Chief Executive Denise Morrison, who wanted Campbell to sell a range of healthy foods from “soup to nuts”.
Under Morrison, the company arranged its products into three parts in 2015, setting up the new Campbell Fresh business. The unit was meant to tap into consumers’ booming appetite for healthier foods but the business struggled, resulting in a two-year decline in organic sales.
Morrison stepped down abruptly in May after a string of poor results. On the same day, the company announced a sweeping review of its portfolio and board member Keith McLoughlin was named interim CEO.
Campbell’s share price has fallen by a third over the past two years as young consumers turn away from its soups and Pepperidge Farm cookies.
One of America’s best-known companies, which revolutionized the home-cooking industry with easy-to-prepare soups and low-cost production techniques, it is now struggling to keep up with healthier tastes and trying to control costs.
With a market value of about $12 billion, it is the latest household name in U.S. business to receive the attention of activist investors, following Procter & Gamble Co (PG.N), Xerox Corp (XRX.N) and others.
Historically, the company has resisted big changes, being effectively controlled by the heirs of John Dorrance, the chemist who invented condensed soup and went on to run the company a century ago.
Dorrance’s grandchildren Mary Alice Malone, who raises horses in Pennsylvania, and her brother Bennett Dorrance, a real estate developer in Arizona, between them control 33 percent of Campbell’s shares. They have fended off periodic calls over three decades for the company to sell itself.
In the past, the family has been able to rely on supportive, long-term shareholders. But in the past few months – most notably in the second quarter of 2018, when the company announced its wide-ranging review – a number of hedge fund investors have bought positions and are looking for more sweeping measures, including a sale.