Tags: Darden | Red Lobster | restaurant | hedge fund

Darden Shareholder Starboard Says Red Lobster Plan Falls Short

Monday, 23 Dec 2013 08:40 AM

Darden Restaurants Inc. investor Starboard Value LP, which disclosed a 5.6 percent stake in the restaurant chain Monday, said the company’s plan to separate its Red Lobster chain falls short of what’s needed to boost its value and that it will seek talks with management.

There is “significant opportunity” to improve Darden’s operating performance and potential to generate value from the company’s real estate holdings, Starboard, a New York-based hedge fund, said Monday in a filing.

Darden last week said it would separate its Red Lobster seafood chain through a tax-free spinoff or sale while also halting acquisitions and cutting expenses amid slowing sales momentum. Barington Capital Group LP, which holds about 2.8 percent of Darden’s stock, said the plan was “incomplete and inadequate.”

Shares of Darden, based in Orlando, Florida, rose 6.4 percent to $54.34 in New York Monday, according to unofficial closing figures. The shares rose 13 percent this year through Friday, compared with a 22 percent gain for the Standard & Poor’s 500 Restaurants Index.

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Darden Restaurants Inc. investor Starboard Value LP, which disclosed a 5.6 percent stake in the restaurant chain today, said the company's plan to separate its Red Lobster chain falls short of what's needed to boost its value.
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2013-40-23
Monday, 23 Dec 2013 08:40 AM
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