Hedge Funds Seek Split At Restaurant Owner Darden

Oct 10 2013 | 8:30am ET

Barington Capital Group has lost its taste for the Olive Garden and Red Lobster.

The New York-based hedge fund called on the restaurant chains' parent, Darden Restaurants, to split in two in order to hive off those lower-performing brands from its more high-growth properties, The Wall Street Journal reports.

Barington said it was at the head of a larger investor group that has taken a 2.8% stake in Darden, although it did not disclose its partners in agitating for the split.

In addition to the Olive Garden and Red Lobster, Darden owns six other restaurant chains: Bahama Breeze, Capital Grille, Eddie V's Prime Seafood, LongHorn Steakhouse, Seasons 52 and Yard House.

"We believe that Darden has the potential to deliver significantly higher returns to shareholders," a Barington spokesman told the Journal.

The Barington group is also pushing Darden to cut costs and to extract value from its real-estate holdings; Darden owns the land under more than 1,000 of its more than 2,100 restaurants.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note