Starboard Rejects Latest Offer From Darden

Sep 4 2014 | 7:04am ET

Starboard Value is in no mood for compromise on the eve of an expected proxy-battle victory over Darden Restaurants.

The activist hedge fund yesterday rejected the latest olive branch proffered by the Olive Garden owner, offering Starboard a fourth seat on its board and to replace four other members to avoid the proxy fight. Starboard is seeking the ouster of all 12 members of the Darden board.

Darden has attempted to make peace with Starboard before, in July announcing the resignation of its CEO and a plan to cede three board seats to the hedge fund. But Starboard remains infuriated by Darden’s sale of Red Lobster to a private-equity firm in the face of shareholder opposition, with the company refusing to allow a vote by investors.

Darden’s latest offer follows what it called “extensive conversations” with shareholders. Those talks convinced the company that it had little chance of winning the proxy fight, but that investors remained uncertain about electing Starboard’s entire slate at Darden’s Oct. 10 annual meeting.

“We believe this slate avoids many of the risks and destabilization that would result from full board turnover and giving control to a single shareholder’s nominees, particularly given the positive momentum we are achieving in Darden’s operations,” Chairman Charles Ledsinger, who is not seeking reelection, said.

Starboard rejected the plan as “just another poorly conceived and suboptimal solution”


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