Campbell Chief Quits, Spurring Talk of Takeover

Campbell Soup Co. said Wednesday that its chief executive was retiring early, and the news sparked renewed takeover speculation, sending the company’s stock sharply higher.

Campbell’s stock shot up $3.125 to $46.875 on the New York Stock Exchange.

The latest sign of turmoil at the Camden, N.J.-based soup maker revived the takeover rumors swirling around the company since the death in April of its patriarch, Chairman John Dorrance Jr., the son of the company’s founder.

The resignation of R. Gordon McGovern, 63, follows a restructuring that included layoffs and plant closings at the once-paternalistic company, which has been changing since Dorrance’s death.

Campbell said McGovern was retiring early for personal reasons. But industry analysts speculated that he may have been pushed out or decided to leave because of infighting.

McGovern’s retirement “is not a surprise,” said John McMillin at Prudential-Bache Securities. “The company was struggling under his leadership and basically a change was needed.”

“One one side, he had some good product lines and got the company moving ahead,” Wheat First Securities analyst John Maxwell said of McGovern. “On the other side, it seemed he never could get the whole company working together.”

The combination of low profits, a depressed stock price and brand-name assets make Campbell particularly vulnerable to a takeover. Its well-known canned soups and other food brands, such as Franco-American, V-8 Juice and Swanson frozen foods, are considered valuable.

The company said it has named Senior Vice Presidents Herbert Baum, 53, and Edwin Harper, 47, as executive vice presidents. Responsibility for day-to-day operations will be divided between the two, pending the selection of a new chief executive to succeed McGovern, who was with the company for more than 30 years.

Campbell said both Baum and Harper, among others, are candidates for the post of chief executive. McMillin said Baum was the probably the leading candidate among the insiders. Baum is president of Campbell U.S.A., Campbell’s main operating unit, while Harper is chief financial officer.