Friday, 1 July 2016
Last updated 2 hours ago
Mar 14 2014 | 9:16am ET
Hedge fund Starboard Value is filling its ranks with Darden Restaurants veterans as it battles that company’s plans to spin-off its Red Lobster franchise.
Starboard said this week that it had hired Bob Mock as an adviser to the campaign, which seeks a much more radical break-up of Darden. Mock served as executive vice president of operations at Olive Garden, one of the eight restaurant chains owned by Darden and one which Starboard and fellow activist Barington Capital Group wants to see spun off with Red Lobster.
At Olive Garden, Mock worked under former president Brad Blum, who became an adviser to Starboard last month. The hires could indicate that Starboard is building a potential leadership group to run Darden should it and Barington win a proxy battle.
Starboard and Barington want to see Olive Garden and Red Lobster separated from Darden’s six faster-growing chains. The two hedge funds have also mooted a real-estate spin-off.
On Monday, Darden said in a regulatory filing that an independent Red Lobster “will be a highly-leveraged company.” It noted that the chain had suffered an 82% drop in profits in the first half of Darden’s fiscal year.