Campbell Soup working towards settlement that would add two Third Point nominees to board

Campbell Soup is working towards a deal with Third Point that would add two of the activist fund's nominees to its board, former Blue Buffalo CEO Kurt Schmidt and Comscore President Sarah Hofstetter, a person familiar with the situation told CNBC on Sunday.

As part of the deal, Campbell would expand the size of its board by at least two board seats, the person said. Campbell currently has 12 board members, with the ability to go to 14, with board approval. Its bylaws could be amended to boost the board even more. The talks come just days before Campbell shareholders are set to meet on Thursday, Nov. 29.

The person cautioned that the settlement is not yet official. It is possible its terms may change or the two may not reach a settlement at all.

The Wall Street Journal first reported the settlement talks earlier on Sunday.

The person requested anonymity because the negotiations are confidential. Third Point wasn't immediately available for comment.

Should Third Point and Campbell secure a deal, it would mark a huge shift for a soup company steeply tied to its tradition of largely being run as a family company. Three of Campbell's heirs sit on its board. The descendant family owns at least 41 percent of the company.

Third Point and its founder, Dan Loeb, which have a roughly 7 percent stake in Campbell, originally wanted to replace the soup company's entire board. Third Point is now aiming to add only five directors, it has said.

If Third Point gains board seats, it doesn't necessarily mean the entire company will get sold. While Third Point originally called for a sale of Campbell, it is unclear there is a buyer at a good price for the entire company.

But Third Point has been urging Campbell to consider a split, a move Campbell said it previously weighed along with a number of other strategic options. Having more influence on the board could make such a move more likely. It may also put pressure on Campbell's owners to act quickly.

In recent weeks, both sides of the proxy battle have faced blows to their campaign.

In October, Campbell Soup heirs, who hold roughly 41 percent of Campbell, announced their support of the company.

Earlier this month, influential shareholder advisory firm ISS wrote an opinion in favor of adding all five of Third Point's nominees. ISS pointed to a number of missteps it said the company made under its current board, underlined by its financial performance. The soup company has delivered a 19 percent total shareholder return over the last 20 years, while the S&P 500 has nearly tripled in the same period. It's stock is down nearly 16 percent since January.

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