Investment firm Starboard Value rejects latest board proposal from Olive Garden parent Darden
Starboard Value LP will continue its proxy fight with Darden Restaurants, as the activist investor rejected the latest offer from the operator of Olive Garden restaurants to resolve a dispute over control of the company.
In a form filed with the Securities and Exchange Commission, Starboard said Wednesday that its 12 nominees for the board are more qualified than the latest group of candidates Darden has proposed. Starboard said its candidates are also more likely to create value for Darden shareholders, and said that next week it will release a plan to transform the company and increase shareholder value.
Darden Restaurants Inc.'s other restaurant chains include Bahama Breeze and LongHorn Steakhouse. Starboard is Darden's second-largest shareholder and it objected to the sale of the company's Red Lobster chain earlier this year. The firm wants to replace Darden's entire board of directors at the company's annual shareholder meeting, which is scheduled for Oct. 10.
On Tuesday, Darden offered to let Starboard nominate four candidates to the board. The Orlando, Florida, company said it would nominate four incumbent independent directors and and choose four more directors who have no connection to Darden or Starboard.
Starboard said Wednesday that 10 of its nominees had no connection to the firm before it decided to nominate them.
Darden had previously offered to let Starboard choose three nominees for the board.
Shares of Darden Restaurants lost 21 cents to $47.54 in afternoon trading.
In July, Darden sold its Red Lobster chain to investment firm Golden Gate Capital for $2.1 billion. Starboard and another investment firm, Barington Capital, objected to the nature of the breakup. The day the sale closed, Darden announced that CEO Clarence Otis would step down after 10 years at the helm and said it would split its chairman and CEO roles.