Barington Asks Darden To Replace CEO

0
Barington Asks Darden To Replace CEO
By . The original uploader was Kalel2007 at English Wikipedia (Source: Extracted from a PDF file by Kalel2007) [Public domain], via Wikimedia Commons

Barington Capital Group LP Wednesday said it has lost confidence in Darden Restaurants, Inc. (NYSE:DRI)’s chief executive officer Clarence Otis.

In its letter released today, New York-based Barington said Darden Restaurants, Inc. (NYSE:DRI) would be worth ‘substantially more’ if the CEO were more effective.

David Einhorn At The 2021 Sohn Investment Conference: Buy These Copper Plays

david einhorn, reading, valuewalk, internet, investment research, Greenlight Capital, hedge funds, Greenlight Masters, famous hedge fund owners, big value investors, websites, books, reading financials, investment analysis, shortselling, investment conferences, shorting, short biasThere's a gold rush coming as electric vehicle manufacturers fight for market share, proclaimed David Einhorn at this year's 2021 Sohn Investment Conference. Check out our coverage of the 2021 Sohn Investment Conference here. Q1 2021 hedge fund letters, conferences and more SORRY! This content is exclusively for paying members. SIGN UP HERE If you Read More


Barington sought Darden to split

Last year, activist investor Barington Capital urged Darden Restaurants, Inc. (NYSE:DRI) to split into two separate companies. It was reported that the investor group pushed Darden to create one company with its Olive Garden and Red Lobster restaurants and another with its higher-growth chains that include Capital Grille.

In December, Darden announced that it would spin off its Red Lobster chain in a move to see more from Darden’s stock value. In addition to the Red Lobster spinoff, Darden announced that it would slow or halt its expansion of its Olive Garden restaurants while slowing the acquisition of new properties for the LongHom Steakhouse chain.

Darden’s move doesn’t go far enough

Last month, Starboard Value LP, the activist investor headed by Jeffrey Smith, sent a letter to the leadership of Darden Restaurants, Inc. reiterating its position that the current plan of restaurant operator to spin off or sell Red Lobster is not in the best interest of shareholders and it could potentially destroy substantial value.

Earlier this month, Darden Restaurants, Inc. (NYSE:DRI) said it is continuing its push to spin off or sell Red Lobster and the process was already ‘well under way’. Darden’s results have been dragged down due to poor performance by Red Lobster and Olive Garden, the company’s biggest casual-dining chain by revenue.

Barington Capital Group LP recently owned over 2% of Darden.

Barington’s letter released today is intended to turn up the heat at Darden Restaurants, Inc. (NYSE:DRI). Both Barington and Starboard Value have been agitating for drastic moves, including breaking apart the company’s brands that they contend will bolster returns for investors.

However, Darden’s turnaround plan including the spinoff of its Red Lobster chain, doesn’t go far enough with Starboard and Barington. The hedge fund Starboard is now seeking a special shareholder meeting on the proposal. Barington is urging Darden’s board to consider replacing Mr. Otis with someone more experienced in the restaurant industry.

No posts to display