Starboard Value has urged Darden Restaurants Inc to delay the spinoff of its struggling Red Lobster chain, becoming the second activist investor in as many weeks to call on the company to rethink its strategy for improving results.The calls for change from two investors holding almost 8 percent of Darden shares has put intense pressure on Chairman and Chief Executive Clarence Otis.Otis has been CEO of the Olive Garden parent since November 2004 and Chairman of Darden's Board of Directors since November 2005. He orchestrated the acquisitions of LongHorn Steakhouse, Capital Grille, Eddie V's and Yard House, which critics say led to a lack of focus, bloated operating costs and roughly 18 months of market share losses at its three biggest brands."The proposed Red Lobster separation is not just a sub-optimal outcome, but one that may prove to be value destructive - potentially even worse for shareholders than the status quo," Starboard Value Managing Member Jeffrey Smith wrote in a letter to Darden's CEO and directors on Tuesday.
Darden Restaurants, Inc. is a full service restaurant company. Shares of DRI fell by 0.13% or $-0.064/share to $50.90. In the past year, the shares have traded as low as $44.11 and as high as $55.25. On average, 1556310 shares of DRI exchange hands on a given day and today's volume is recorded at 926411.
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