NEW YORK, NY
Starboard has delivered a letter to Darden Restaurants' Chairman and CEO, Clarence Otis as well as the company's board of directors expressing serious concerns about the company's future plans. Starboard is one of the largest shareholders of Darden Restaurants with a total share ownership of approximately 5.5% of the common stock, according to Market Watch.
In the letter, Starboard expressed significant doubts about the company's plans to either spin-out or sell Red Lobster, saying the plan is not in the best interests of the shareholders and could seriously lower the stock's value.
The letter also indicates that Starboard has spoken with a number of Darden shareholders who also have expressed similar concerns. The Starboard sent a previous letter in January expressing concerns about the Red Lobster separation, which received a quick response from Darden reaffirming the board's decision. Starboard described this response as "hasty" and "lacking any substance."
It does appear that it is Darden's intention to complete the Red Lobster separation prior to holding the company's Annual Meeting of Shareholders, where all of the company's directors will be up for election.
Starboard described the plan as "potentially value destructive" and urged the board to listen to the shareholders and "do what is right."
How will the market react to Starboard's assessment and publicized letter to the Board of Directors? Will Darden follow through with its plans to separate Red Lobster?
Stay tuned to DeliMarket TV, as we continue to follow this developing story. Market Watch