Jeffrey Smith, Starboard Value’s Investor Presentation On Darden Restaurants, Inc.(DRI); Argue Against Red Lobster Spin-off

Jeffrey Smith and Starboard Value are not fond of the decision of Darden Restaurants, Inc.(NYSE:DRI) management to proceed with the spin-off of one of its subsidiaries, despite protests from a number of important shareholders. In a recently amended filing with the Securities and Exchange Commission, Starboard Value has sent an investor presentation to the Chariman and Chief Executive Officer of Darden Restaurants, Clarence Otis, to reiterate their position against the spin-off. Smith and Starboard currently hold approximately 7.25 million shares, which accounts for 5.5% of the company’s common stock and makes them one of the largest shareholders.

Jeff Smith

Jeffrey Smith and Starboard Value had previously sent an open letter to express their disagreement with the firm’s plan to spin-off Red Lobster and call for a shareholder meeting to vote on the issue.

In their presentation, Smith and Starboard Value argue that the spin-off of Red Lobster would have a negative impact on the value of the company and the interests of its shareholders. They have also accused the management of incompetence and that the company has constantly disregarded the concerns of its shareholders. Smith and Starboard have also called for a special shareholder meeting to vote on this issue and have proposed a value creation plan. The full presentation can be found below:


Darden Restaurants, Inc. (NYSE:DRI) is an operator of restaurant services and, beside Red Lobster, manages restaurants like Olive Garden, LongHorn Steakhouse and other. The company has a market cap of $6.89 billion and pays an annual dividend of $2.15, which represents a yield of 4.10%. The stock is traded at a trailing Price to Earnings (P/E) ratio of 20.xx, close to the industry average of 23.10. Darden Restaurants announced revenues of $2.23 billion and earnings of $0.82 per share for the 13 weeks ending February 23, 2014. Analysts expect the company to register revenues of $2.34 billion and earnings per share of $0.94. The stock is touted mainly as a ‘Hold’.

Ken Griffin, the manager of Citadel Investment Group, is also betting big on Darden Restaurants, Inc. (NYSE:DRI), having massively increased his fund’s stake to 1.13 million shares valued at $61.6 million during the fourth quarter of 2013. Israel Englander is also keeping tabs, as his fund, Millennium Management, holds 1.33 million shares reportedly worth $72.5 million.

Disclosure: none.

Recommended reading:

Starboard Sends Another Letter To Shareholders of Darden Restaurants Inc. (DRI)

Jeff Smith Sends Letter to Darden Restaurants, Inc. (DRI)’s CEO; Asks to Delay Red Lobster Spin-off

Jeff Smith Initiates 5.6% Stake and Goes Activist on Darden Restaurants, Inc. (DRI)

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Bloodiest UFC Fights Ever Fought

Most Expensive Rum Brands in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!