In a new filing with the U.S. Securities and Exchange Commission, Starboard Value LP, managed by Jeffrey Smith, has disclosed a statement issued in response to Darden Restaurants, Inc. (NYSE:DRI)’s announcement that the company nominated a new slate of candidates to be elected to its board of directors at the upcoming annual meeting of shareholders. Starboard Value’s statement accompanied a WHITE proxy card to be used to solicit votes for the election of a slate of director nominees at the company’s shareholders meeting.
Starboard Value holds approximately 8.8% of the outstanding common stock of Darden Restaurants, Inc. (NYSE:DRI). According to the hedge fund, it believes that Darden Restaurants, Inc.’s (NYSE:DRI) reactionary, last-minute and confused decision to once again shuffle its proposed slate of director nominees further demonstrates that this board is lacking leadership and flailing without direction.
Further, Starboard Value said that it believes the company’s argument that its slate of four incumbents, along with four new nominees, ensures “continuity” and prevents the hedge fund from “taking control” of Darden Restaurants, Inc. (NYSE:DRI) without paying a premium are misguided and further demonstrates the current board’s inability to view the company from the perspective of a shareholder.
Starboard Value added that its slate is significantly more qualified and far more likely to create substantial shareholder value, compared to the Darden Restaurants, Inc. (NYSE:DRI).
In addition, the hedge fund noted that any value that is created through better oversight and the implementation of its transformation plan will benefit all the company’s shareholders equally in proportion to their ownership.
“While Darden’s incumbent directors may think of “control” as simply a matter of who occupies the board room, shareholders understand that they, not the board, are the owners of Darden and that the board is elected to represent their interests – the annual meeting is about electing the best possible board,” Starboard Value said.
Moreover, Starboard Value stated it believes that its slate of highly qualified nominees represents by far the best outcome for Darden Restaurants, Inc. (NYSE:DRI) shareholders, with the best mix of complementary skill sets, experience and perspectives directly relevant to the company’s business and current challenges.
Starboard Value also urged shareholders vote the WHITE Proxy Card to support its slate of 12 highly qualified director nominees, who, Starboard Value believes, are fully committed to representing the best interests of all shareholders.
At the end of July of this year, Starboard Value disclosed in a new filing with the SEC that it filed a complaint at the Ninth Judicial Circuit Court of Florida against Darden Restaurants Inc. (NYSE:DRI), asking the company to provide certain books and records for purposes of inspection and copying under the Florida Business Corporations Act.