Welcome!

News Feed Item

Starboard Files Definitive Solicitation Statement To Call A Special Meeting Of Darden Shareholders

Believes Special Meeting is the Best Way for Shareholders to Formally Express Their Views and Influence the Red Lobster Separation

NEW YORK, March 20, 2014 /PRNewswire/ -- Starboard Value LP (together with its affiliates, "Starboard"), one of the largest shareholders of Darden Restaurants, Inc. ("Darden" or the "Company") (NYSE:DRI), with ownership of approximately 5.5% of the outstanding common stock of the Company, announced today that it has filed a Definitive Solicitation Statement with the Securities and Exchange Commission seeking to call a Special Meeting of the Company's shareholders in order to provide shareholders with a democratic forum for expressing their views on the proposed separation of Red Lobster.  Starboard has stated that if it is successful in calling the Special Meeting, it intends to solicit shareholder support to approve a non-binding resolution urging the Darden Board not to approve any agreement or proposed transaction involving a Red Lobster separation or spin-off prior to the 2014 Annual Meeting unless such agreement or transaction would require shareholder approval.

Starboard expects to mail the Definitive Solicitation Statement and the accompanying WHITE request card to shareholders on or about March 20, 2014.  Starboard also expects that the record date for the Special Meeting solicitation will be March 20, 2014, the date that Starboard anticipates delivering a signed WHITE written request card to the Company. 

Starboard has also delivered a letter to Darden shareholders together with the Solicitation Statement, the full text of which is available for viewing at the following link: http://tinyurl.com/Letter-To-Darden-Shareholders

Important Excerpts From Starboard's Letter to Shareholders include:

On Why Starboard is Seeking to Take This Extraordinary Step of Calling a Special Meeting to Approve a Non-Binding Resolution:

"Management appears to be targeting completion of the Red Lobster Separation prior to the Company's 2014 Annual Meeting of Shareholders (the "2014 Annual Meeting").  Under the Company's restrictive Bylaws, the only practical way for shareholders to influence or seek to change the composition of the Board is at an annual meeting . . . We are concerned that one reason Darden may be hurrying to complete the Red Lobster Separation prior to the 2014 Annual Meeting is to limit shareholders' ability to influence this critical transaction through the election of an alternate slate of directors."

"If the Board wishes to avoid multiple potential solicitations, they can easily avoid this by (i) deferring any final decision on the Red Lobster Separation until after the 2014 Annual Meeting, (ii) agreeing to put any specific Red Lobster transaction up to a shareholder vote, or (iii) engaging with Starboard now to discuss Board composition and ensure that shareholders have adequate representation to assist in the decision making around Red Lobster and other initiatives."

On How Starboard Would Expect the Board to Respond if Shareholders Support the Calling of the Special Meeting:

"If we are successful in calling the Special Meeting, we believe that it would be incumbent upon the Board to defer any final decision regarding the Red Lobster Separation until after the Special Meeting is held.  Further, if shareholders support our resolution at the Special Meeting, we are hopeful that the Board will not proceed with the Red Lobster Separation prior to the 2014 Annual Meeting without shareholder approval.  It is important to understand that Darden's entire Board is up for election just a few months after the expected date of the Special Meeting.  We do not believe that the Board would sanction what we would view as an egregious violation of good corporate governance, like proceeding with the Red Lobster Separation in direct opposition to a clear shareholder directive, especially just months before a potential election contest."

On How Management Has Failed to Present the Case for Separating Red Lobster Now:

"Although management did release an investor presentation on March 3, 2014 (the "Investor Presentation") discussing some of the reasons that the Company chose to separate Red Lobster and other alternatives that management considered, we believe that the Investor Presentation (i) is missing numerous critical details necessary to facilitate a constructive dialogue with shareholders regarding the Red Lobster Separation and possible alternatives, (ii) does not provide sufficient proof that the Red Lobster Separation will create value for shareholders or is better for shareholders than other alternatives, and (iii) contains numerous incomplete and highly misleading statements.  Further, we have serious concerns that the interests of management and the Board are not entirely aligned with the interests of shareholders as it relates to the Red Lobster Separation."

"To be clear, we are not saying that the Company should never separate Red Lobster, or any other concept, but rather that now is not the right time to separate Red Lobster."

On Starboard's Lack of Trust in Management and the Board to Make This Critical and Irreversible Decision to Separate Red Lobster: 

"Darden has underperformed both its closest competitors and the group of companies it identifies as peers for purposes of setting executive compensation by approximately 300% over the last five years."

"Given what we believe to be their track record of poor decision making and execution, we do not think management and the Board should be trusted to make this significant decision without shareholder involvement."

"According to a recent poll conducted by sell-side research firm Hedgeye Risk Management ("Hedgeye"), 84% of respondents said that they did not believe that management's plan to spin-off Red Lobster would create value."

"In a separate survey, sell-side research firm Bernstein Research found that, 'nearly all survey respondents (78%) evinced dissatisfaction with management; most (69%) would support an activist slate of BOD nominees including 80% of current shareholders.'" 

"Given the doubts that shareholders seem to have about the Red Lobster Separation and what appears to be a broad-based lack of trust and confidence due to management's past decisions and performance, it is critical that shareholders be given an opportunity to formally express their views on the proposed separation before it is too late."

On Darden's Disregard for Shareholder Concerns and a Propensity to Silence Critics:

"Darden has a long history of silencing critics and trying to avoid an active dialogue on the key issues facing the Company.  A recent CNBC article titled Darden Uses Lobster Claws On Critical Analysts chronicles tactics used by Darden to put a muzzle on analysts who provide critical analysis....Similarly, we believe Darden has avoided addressing shareholder concerns to-date regarding the Red Lobster Separation...We are troubled by the Company's continued attempts to avoid open discussion on the most important and difficult issues facing the Company."

"Since the Company has little interest in letting shareholders have their say regarding the Red Lobster Separation, the Special Meeting will provide an alternative forum for shareholders to show the Board that Darden's shareholders will not stand to be silenced on this critical issue."

STARBOARD URGES SHAREHOLDERS TO COMPLETE AND RETURN THE WHITE REQUEST CARD!

About Starboard Value LP
Starboard Value LP is a New York-based investment adviser with a focused and differentiated fundamental approach to investing in publicly traded U.S. small cap companies. Starboard invests in deeply undervalued small cap companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.

Investor contacts:
Peter Feld, (212) 201-4878
Gavin Molinelli, (212) 201-4828
www.starboardvalue.com

Okapi Partners LLC
Patrick McHugh / Lydia Mulyk
(212) 297-0720
(877) 285-5990 (toll-free)
[email protected]

SOURCE Starboard Value LP

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, will discuss how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved effi...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, will discuss using predictive analytics to ...
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
The principles behind DevOps are not new - for decades people have been automating system administration and decreasing the time to deploy apps and perform other management tasks. However, only recently did we see the tools and the will necessary to share the benefits and power of automation with a wider circle of people. In his session at DevOps Summit, Bernard Sanders, Chief Technology Officer at CloudBolt Software, explored the latest tools including Puppet, Chef, Docker, and CMPs needed to...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that VAI, a leading ERP software provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. VAI (Vormittag Associates, Inc.) is a leading independent mid-market ERP software developer renowned for its flexible solutions and ability to automate critical business functions for the distribution, manufacturing, specialty retail and service sectors. An IBM Premier Business Part...
More and more companies are looking to microservices as an architectural pattern for breaking apart applications into more manageable pieces so that agile teams can deliver new features quicker and more effectively. What this pattern has done more than anything to date is spark organizational transformations, setting the foundation for future application development. In practice, however, there are a number of considerations to make that go beyond simply “build, ship, and run,” which changes ho...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
In most cases, it is convenient to have some human interaction with a web (micro-)service, no matter how small it is. A traditional approach would be to create an HTTP interface, where user requests will be dispatched and HTML/CSS pages must be served. This approach is indeed very traditional for a web site, but not really convenient for a web service, which is not intended to be good looking, 24x7 up and running and UX-optimized. Instead, talking to a web service in a chat-bot mode would be muc...