Barington Unmoved By Darden Red Lobster Plan

Jan 15 2014 | 11:33am ET

Unsurprisingly, an activist hedge fund isn't satisfied with Darden Restaurants' plan to spin off its Red Lobster chain, a much more modest restructuring of the company than its own proposal.

Barington Capital Group called last month's plan "incomplete and inadequate." The hedge fund has called for Darden to spin off both Red Lobster and the Olive Garden, to keep them from weighing on the returns from its six smaller, faster-growing franchises. It has also called for a real-estate spin-off.

"Unfortunately, Darden's proposed plan appears to us to be more of an attempt to do the minimum necessary to maintain the status quo than an effort to formulate a truly comprehensive strategy to improve long-term shareholder value," Barington said.

Barington is the second activist hedge fund to attack Darden's plan as going not far enough: Last month, Starboard Value said the proposal "falls significantly short of the actions required to maximize shareholder value."

Barington owns 2.8% of Darden, while Starboard has a 5.6% stake.

Darden defended its plan, saying it was "confident" that "together with actions we are taking to enhance guest experiences and reinvigorate demand, will lead to improved performance in our restaurants and substantially increase value for all Darden shareholders."


In Depth

Q&A: Filippo Pignatti Morano On The Ultimate Alternative Investment...Classic Cars

Jan 29 2015 | 12:37pm ET

In 2011, Filippo Pignatti Morano launched a fund to invest in classic cars. FINalternatives...

Lifestyle

Looking For A Hedge Fund Manager? Try Davos

Jan 28 2015 | 8:48am ET

Davos, Switzerland seems to have become the hedge fund capital of the world—at...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note