Darden Earnings Estimate Disappoints As Proxy Contest Looms

Aug 12 2014 | 6:47am ET

If Darden Restaurant’s board of directors hoped that its sale of Red Lobster would pay immediate dividends and convince investors not to throw them out next month, it is likely to be disappointed.

The company, which is engaged in a bruising proxy battle with hedge funds Starboard Value and Barington Capital Group, announced predicted first-quarter earnings that missed Wall Street estimates. Analysts had expected 47 cents per share; Darden says it will be between 28 cents and 30 cents.

Darden last month sold Red Lobster to private-equity firm Golden Gate Capital, over the bitter protests of the hedge funds, which say the deal destroyed at least $1 billion in shareholder value. The sale occurred in spite of apparently strong opposition from rank-and-file shareholders, who appeared prepared to back a special meeting to vote on the deal.

Starboard and Barington are seeking the replacement of Darden’s entire board at next month’s annual meeting. Analysts expect that the hedge funds’ slate will be victorious.


In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...

 

From the current issue of