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.
A hedge fund targeting Darden Restaurants has hired a former president of Olive Garden, one of the company's major chains.
Brad Blum, now a Winter Park restaurant executive, is working as an adviser to Starboard Value, according to documents filed Thursday with the U.S. Securities and Exchange Commission….
Starboard is paying Blum $50,000 in an agreement entered into Wednesday. Blum will use the proceeds from that compensation to acquire Darden stock….
The move could help Starboard gain more insight into Darden, where Blum worked from 1995 to 2002. Blum could end up on Darden's board as a result, said Mark Kalinowski, a restaurant analyst for Janney Capital Markets.
Hiring Blum was "a very smart thing for Starboard to do," Kalinowski said. "If you're going to try to find an ally that can help you shake Darden up a little bit, this is exactly the type of person you should be seeking out."
Former Olive Garden president joins hedge fund battling Darden [Orlando Sentinel]