Darden Restaurants Inc (NYSE:DRI) has canceled its analyst and investor meeting slated for later this month as two activist shareholders lobby for bolder steps to improve performance at its chain eateries, ranging from Olive Garden to Capital Grille.
Rather than hold the meeting, which was scheduled for March 28, the company will meet individually with analysts and investors, a spokesman said on Wednesday.
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Darden is the biggest U.S. operator of full-service restaurant chains as measured in outlets.
"We're taking it on the road," said spokesman Rich Jeffers. "We're reaching out to everyone who was planning to attend."
Jeffers told Reuters the meetings started on Monday and that Darden believes one-on-one sessions will be more productive than a single group meeting.
Darden has received negative press in the past for shutting out analysts who are critical of management. News of the canceled meeting revived those complaints in some circles.
"When there are problems and they don't want to take difficult questions, they shut down management access to analysts," said Hedgeye Risk Management restaurant analyst Howard Penney.
Penney has been a vocal critic of Darden and had not yet registered to attend the March 28 meeting before it was canceled.
Barington Capital Group LP has been pushing Darden to put its more mature Olive Garden and Red Lobster brands into one company, and its higher-growth chains, including LongHorn Steakhouse and Capital Grille, into another.
It also wants the company to create a publicly traded real estate investment trust (REIT) to unlock the value of its property holdings.
In a conference call with analysts on Monday, Darden reiterated its plan to spin off or sell Red Lobster seafood chain, rebuffing Barington and Starboard Value LP, another activist investor pressuring Darden to rethink plans for Red Lobster. It did not announce the cancellation of the analyst and investor meeting at that time, which surprised analysts contacted by Reuters.
Starboard, which owns 5.5 percent of Darden shares, said in late February that the plan to spin off Red Lobster should be delayed and put to a shareholder vote. Barington, which has a stake of about 2 percent, said it agreed.
Barington declined comment on Wednesday and Starboard did not immediately respond to requests.
Darden shares ended 1.4 percent lower at $47.94 on the New York Stock Exchange on Wednesday, not far from the 52-week low of $44.78.
(By Lisa Baertlein; Editing by Jeffrey Benkoe and Matthew Lewis)
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