Welcome!

News Feed Item

Starboard Delivers Written Requests to Call a Special Meeting From Holders of More Than 55% of Darden's Outstanding Shares

Starboard Gratified by the Strong Show of Shareholder Support for the Special Meeting Ahead of the Goal Date for Submissions

NEW YORK, April 22, 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 delivered by letter to Darden written requests from the holders of more than 55% of the Company's outstanding common stock to call a special meeting of shareholders (the "Special Meeting").  At the Special Meeting, Starboard will present a non-binding resolution urging the Board of Directors of Darden (the "Board") not to approve any agreement or proposed transaction involving a Red Lobster separation or spin-off (the "Red Lobster Separation") prior to the 2014 Annual Meeting of Shareholders (the "2014 Annual Meeting") unless such agreement or transaction would require shareholder approval.

Jeffrey C. Smith, Managing Member, Chief Executive Officer and Chief Investment Officer of Starboard Value LP, stated, "We are pleased that more than 55% of Darden's outstanding shares have consented to call the Special Meeting ahead of the April 24th goal date. We have met the required threshold needed to call the Special Meeting. We understand that by delivering the consents ahead of the goal date, certain shareholders may not yet have had the chance to consent. However, we have chosen to deliver the consents to Darden now in order to ensure that the Special Meeting is held as soon as possible and that Darden receives the strong and clear message that shareholders want a say on any transaction to separate Red Lobster."

Added Smith, "Over the past several months, we have detailed in numerous letters and presentations why we believe the proposed Red Lobster Separation is the wrong spin-off, at the wrong time, for the wrong reasons.  We are proud of the strong support from our fellow shareholders during the solicitation process and recognize that shareholders have taken action to demand that their voices be heard at a Special Meeting.  Shareholders fully deserve the opportunity that a Special Meeting will provide to allow for a fulsome debate as to the merit, or lack thereof, of a potential Red Lobster Separation.  This show of support from a majority of the Company's shareholders is powerful - the Board should make sure that it begins to listen to the true owners of the Company.  We believe it is incumbent upon the current Board to embrace the clear will of Darden shareholders and promptly schedule the Special Meeting so that shareholders can express their views on the Red Lobster Separation through an open and transparent process.  We are hopeful that Darden will take a step back and do the right thing by not seeking to complete any Red Lobster Separation prior to the Special Meeting."

The full text of the letter that Starboard delivered to Darden together with the written requests follows:

April 22, 2014

Darden Restaurants, Inc.
1000 Darden Center Drive
Orlando, Florida 32837
Attn:     Teresa M. Sebastian
            Senior Vice President, General Counsel and Secretary

Re:  Starboard Value LP Written Request Solicitation of Darden Restaurants, Inc. Shareholders

Dear Ms. Sebastian:

Starboard Value LP, a Delaware limited liability company ("Starboard"), with a business address of 830 Third Avenue, 3rd Floor, New York, NY 10022, hereby delivers to you, the Corporate Secretary of Darden Restaurants, Inc., a Florida corporation ("Darden" or the "Company"), written requests to call a special meeting of the Company's shareholders (the "Special Meeting") pursuant to Section 607.0702 of the Florida Business Corporations Act (the "FBCA") and  Article XI of Darden's Articles of Incorporation, as amended (the "Charter").  Such written requests are signed by shareholders of not less than 50% of all the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting, as required by the FBCA and Charter.

As you can see below, Starboard has received the support of shareholders representing approximately 55.5% of the outstanding shares of Common Stock to request that the Company call the Special Meeting for the following purpose:

to approve a non-binding resolution urging the Board of Directors of the Company (the "Board") not to approve any agreement or proposed transaction involving a separation or spin-off of the Company's Red Lobster business prior to the 2014 Annual Meeting of Shareholders (the "2014 Annual Meeting") unless such agreement or transaction would require shareholder approval.

The written requests are from the holders of 73,233,321 shares of Common Stock (the "Shares") as of the March 20, 2014 record date (the "Record Date"), and represent 55.5% of the outstanding shares of Common Stock as of the Record Date.  As Darden clearly acknowledged in its Revocation Statement, "the Company must call a special meeting of shareholders upon the written, valid requests of the holders of not less than 50% of all the votes entitled to be cast on the issue proposed to be considered at the proposed special meeting." Starboard is hereby delivering valid requests of the holders of over 50% of all the votes entitled to be cast and we therefore expect the Company to call the Special Meeting without delay.

This strong show of shareholder support unequivocally demonstrates that shareholders demand the opportunity to exercise their right to call the Special Meeting and to have their voices heard promptly on the Company's proposed separation of Red Lobster (the "Red Lobster Separation").   We have received and are therefore delivering the requisite written requests ahead of our April 24, 2014 goal date.  Shareholders understand the urgency of the situation involving the Red Lobster Separation and we fully expect the Special Meeting to be called without any unnecessary delay. 

Starboard therefore urges the Company to take the necessary steps to provide notice to shareholders of the Special Meeting immediately in accordance with the Section 607.0705 of the FBCA and Charter. 

While we understand that the Company has some discretion in establishing the date, time, place and record date for the Special Meeting, we caution the Company not to attempt to delay the Special Meeting to the outer time limits provided under the FBCA and Bylaws. Starboard, as well as, we believe, all the shareholders who have joined us in requesting the Special Meeting, would view any such intentional delay as yet another in the growing list of shareholder-unfriendly actions that this Board has taken.  Starboard is hopeful that the Company will respect the clear will of its shareholders by calling the Special Meeting immediately so that shareholders can discuss this critical issue before it is too late.  

To be even more clear, if the Company has not provided notice to shareholders of the Special Meeting by Tuesday, May 6, 2014 for a Special Meeting to be held within sixty (60) days of such date, then we will have no choice but to conclude that the Company does not have a good-faith intent to call the Special Meeting in a timely manner. 

Although the Red Lobster Proposal is non-binding and would not legally prevent the Company from proceeding with the proposed separation, Starboard does not believe that the Board would sanction proceeding with the Red Lobster Separation in direct opposition to a clear shareholder directive. The Board moving forward with the Red Lobster Separation despite clear concerns of shareholders, we believe, would be an egregious violation of good corporate governance. We remind you that the Company stated in its Revocation Statement that "if a special meeting is called and Starboard's proposed resolution is presented to shareholders, serious consideration will be given to the results of the meeting and any other shareholder feedback received by the Company." 

We appreciate that the Company has acknowledged the influence of a shareholder vote and hope that the Company similarly respects the will of shareholders evidenced by the delivery of the written requests and promptly calls the Special Meeting.  If shareholders support Starboard's resolution at the Special Meeting, we believe it would be incumbent upon the Board not to proceed with the Red Lobster Separation without shareholder approval.

While we hope that it will not be necessary, Starboard hereby reserves its right to take any actions permissible under Florida law to compel the Company to call the Special Meeting, as necessary. 

The enclosed materials, which are attached hereto as Exhibit A, include:

  1. A Written Request executed by Broadridge Financial Solutions, Inc. on behalf of its clients, representing 72,845,142 Shares.
  2. A Written Request executed by Morgan Stanley & Co. Incorporated, DTC participant 50, representing 59,249 Shares.
  3. A Written Request executed by Mediant Communications, representing 63,952 Shares.
  4. Written consents executed by Registered Shareholders, representing 264,977 Shares.

The Depository Trust Company has reported that on March 20, 2014, they held 128,205,307 shares of Darden Restaurants Inc. on behalf of their clients.  According to the Company's Revocation Statement in connection with the Special Meeting, as of the Record Date, there were 131,960,633 outstanding shares of Common Stock.

Please acknowledge your receipt of this letter and the enclosed written requests by signing and date-stamping the attached copy of this letter and returning it in the postage paid envelope provided.              

Very truly yours,

Jeffrey C. Smith
Managing Member
Starboard Value LP

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
Bruce H. Goldfarb/Patrick McHugh
(212) 297-0720

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
With more than 30 Kubernetes solutions in the marketplace, it's tempting to think Kubernetes and the vendor ecosystem has solved the problem of operationalizing containers at scale or of automatically managing the elasticity of the underlying infrastructure that these solutions need to be truly scalable. Far from it. There are at least six major pain points that companies experience when they try to deploy and run Kubernetes in their complex environments. In this presentation, the speaker will d...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Le...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
CI/CD is conceptually straightforward, yet often technically intricate to implement since it requires time and opportunities to develop intimate understanding on not only DevOps processes and operations, but likely product integrations with multiple platforms. This session intends to bridge the gap by offering an intense learning experience while witnessing the processes and operations to build from zero to a simple, yet functional CI/CD pipeline integrated with Jenkins, Github, Docker and Azure...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Dhiraj Sehgal works in Delphix's product and solution organization. His focus has been DevOps, DataOps, private cloud and datacenters customers, technologies and products. He has wealth of experience in cloud focused and virtualized technologies ranging from compute, networking to storage. He has spoken at Cloud Expo for last 3 years now in New York and Santa Clara.
Enterprises are striving to become digital businesses for differentiated innovation and customer-centricity. Traditionally, they focused on digitizing processes and paper workflow. To be a disruptor and compete against new players, they need to gain insight into business data and innovate at scale. Cloud and cognitive technologies can help them leverage hidden data in SAP/ERP systems to fuel their businesses to accelerate digital transformation success.
Containers and Kubernetes allow for code portability across on-premise VMs, bare metal, or multiple cloud provider environments. Yet, despite this portability promise, developers may include configuration and application definitions that constrain or even eliminate application portability. In this session we'll describe best practices for "configuration as code" in a Kubernetes environment. We will demonstrate how a properly constructed containerized app can be deployed to both Amazon and Azure ...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.