So, the people who were Darden Restaurants directors yesterday are no longer Darden directors today, what with every single one of them having been handed a much-deserved ass-kicking by hedge fund Starboard Value. The activist hedge fund correctly predicted that boards which (a) produced an ill-conceived plan to sell one thing for a song to stave off a couple of activist hedge funds and then (b) refuse to allow shareholders to vote on that plan even though most of them make very clear they’d like to are rather vulnerable when it comes to annual meeting time, which time was today. And while you can prevent shareholders from voting on ill-conceived sales, it is likely to incline them against you when you cannot keep them from voting, at annual meetings, say. Read more »
Once upon a time, say from 1995 through 2002, there was no better place to be come chow time than the Olive Garden. Oh, the unlimited soup, salad and breadsticks! The pastas, whose recipes were pretend-learned at the maybe-not-so-much-extant Culinary Institute of Tuscany! The shrimp scampi, rivaled only by OG’s sister restaurant and frequent neighbor, Red Lobster.
Well, things have gone somewhat downhill since those carefree salad days, and now the OG is a millstone around the neck of its owner, Darden Restaurants. Both because it is not growing as fast as such Darden gems like Bahama Breeze and LongHorn Steakhouse and Eddie V’s Prime Seafood, and because it has attracted the attention of hedge-fund rabble-rousers Barington Capital Group and Starboard Value.
To fend off these advances, Darden has suggested spinning off Red Lobster—and Red Lobster alone. This will not do for Barington and Starboard Value, who propose much more radical surgery, including a real-estate spinoff, but, most importantly, keeping the largest purveyors of shrimp scampi in the U.S. under one roof. And that is something Brad Blum, Olive Garden president from 1995 to 2002, can get behind. Read more »