Activist hedge fund Starboard Value is demanding that Darden Restaurants seek shareholder approval for a spin-off plan it opposes.
The firm is seeking a special meeting in advance of Darden's September annual meeting to give stockholders an opportunity to weigh in on Darden's proposal, which would separate Red Lobster from its seven other chains. Starboard has called the plan "ill-conceived and potentially value destructive;" it and fellow activist hedge fund Barington Capital Group are pushing a more radical break-up plan for Darden.
Starboard needs to win 50% shareholder support in the next 60 days to force the meeting, where it would offer a non-binding proposal opposing Darden's Red Lobster plans. Darden has said it wants to complete the spin-off early in the second half, prior to the annual meeting; Starboard has warned it will seek the ouster of its entire board at that meeting if it does.