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

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.