Starboard Wins Backing To Force Meeting On Red Lobster Spin-Off

Apr 23 2014 | 10:13am ET

Hedge fund Starboard Value may get its chance to block Darden Restaurants’ plan to spin off its Red Lobster chain.

The activist said it had won the backing of 54% of Darden shareholders to force a special meeting and a vote on the spin-off plan. Darden has said that the vote would not require a shareholder poll on the Red Lobster plan. What’s more, the company has 60 days to set a date for the meeting and another 60 to actually hold it, which could mean it will present investors with a fait accompli: Darden has said it wants to spin-off or sell Red Lobster early in its next fiscal year, which begins in just over a month.

Starboard has called Darden’s plan “ill-conceived and potentially value destructive.” Instead, the hedge fund wants Darden to split into three companies, with Red Lobster and the Olive Garden composing one, Darden’s faster-growing chains another and a real-estate investment trust the third.

Starboard has said it will seek the ouster of Darden’s board if the company moves forward with its plan without a vote.

“The Red Lobster separation doesn’t make a lot of sense,” Starboard’s Jeffrey Smith told CNBC. “Shareholders are voicing their opinions very strongly that they are not in favor. Research analysts have been against this separation.”

“You would think management and the board would have gotten the message long before now that change is required.”


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Why Is The Shipping Industry Underwater?

Jul 31 2014 | 7:31am ET

Anyone who’s taken a look at the global shipping industry recently probably knows...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note