Takeover speculation heats up Campbell Soup shares

Campbell Soup Co. shares rose significantly Monday on speculation the Camden-based company is being eyed by prospective takeover suitors.Campbell Soup Co. shares rose significantly Monday on speculation the Camden-based company is being eyed by prospective takeover suitors.

The New York Post, quoting unnamed sources, reported Friday that Kraft Heinz Co. is interested in a takeover of Campbell Soup and others including General Foods could also show interest.

On Monday, Campbell shares (NYSE: CPB) were up $3.56, or 9.2%, at $42.16 in mid-afternoon trading despite a markedly downbeat broader market.

Upon Denise Morrison’s departure as CEO in May Campbell announced it would conduct a strategic review of its portfolio moving forward. But Campbell and Kraft Heinz spokespersons declined to comment on the market speculation Monday.

“Obviously [Campbell] had encountered a number of headwinds, particularly surrounding both their execution and inability to offset a number of headwinds,” said market analyst Erin Lash at Chicago-based Morningstar. “As a result, the company had failed to sustainability reignite their sales and profitability despite efforts to diversify away from the mature soup category.”

Kraft Heinz has been vocal about the fact that they want to consolidate the market, according to Lash.

“Our contention has been that Kraft Heinz, while they hunger for a deal, they’re not looking to do something hostile and that’s supported by their quick decision to walk away from their bid for Unilever last February,” Lash said. “Given the fact that Kraft Heinz has been unable to reignite their top-line performance – and given that they spend considerably less than their peers on R&D and marketing as a percentage of sales – it’s possible that there aren’t a lot of willing sellers to tie up with Kraft Heinz.”

Brazil-based 3G Capital, in partnership with Berkshire Hathaway, hold the biggest block of shares in Chicago-based Kraft Heinz.