Jeff Smith

(Reuters))

Starboard's Jeff Smith Resigns as Darden Chairman

Industries Reuters

Olive Garden owner Darden Restaurants' chairman, Jeffrey Smith, head of Starboard Value, has resigned 18 months after engineering the ouster of the company's board.

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Darden's shares, which have risen nearly 60 percent since Smith took over as chairman in October 2014, were up 1 percent at $68.00 in premarket trading on Tuesday.

"I am able to move on to other projects at this time because of the outstanding chemistry and capabilities of both the board and management," Smith said.

Starboard launched a proxy fight last month to overthrow Yahoo Inc's board, including Chief Executive Marissa Mayer who has struggled to turn around the company.

The activist investor is also urging department store chain Macy's Inc to enter into joint ventures for its stores, including the flagship Herald Square store in New York.

Starboard had launched a public battle with Darden's management in 2014, including a 300-slide presentation outlining plans for Darden to sell its real estate, franchise its restaurants, spin off some chains and fix its flagship Olive Garden chain.

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Smith will be replaced as chairman by Charles Sonsteby, an independent director on Darden's board and CFO of arts and crafts retailer Michaels Cos Inc.

Separately, Darden reported a 6.7 percent increase in third-quarter sales to $1.85 billion, beating the average analyst estimate of $1.84 billion.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)