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August 4, 2014
08:35 EDTDRIDarden responds to statements by Starboard regarding Red Lobster sale
In an open letter sent to its shareholders, Darden said, "Darden's Board determined that divesting Red Lobster was in the best interests of Darden and its shareholders. Despite numerous actions taken to improve the business, Red Lobster experienced years of declines in guest traffic, resulting in volatile and consistently weakening financial performance that significantly burdened Darden's results. Red Lobster's negative trends were continuing and accelerating at the time its sale was announced in May. Contrary to Starboard's assertion that it was "rushed," the sale of Red Lobster was the culmination of a robust and deliberate review process that began in early 2013 well before Starboard's investment. This process was designed and enabled Darden to maximize value and minimize risks associated with continuing to own the business, including risks from the brand's ongoing deterioration. The Red Lobster sale better positions Darden for sustained growth, value creation and consistent return of cash to our shareholders in contrast to Starboard's erroneous claim of value destruction. After careful evaluation, the Board was certain that halting a robust Red Lobster sale process mid-course would have negative consequences for the value received and (if any sale could be effected) for the value of Darden. Although Starboard erroneously claims the business was sold at a "discount," the $2.1 billion purchase price represents a premium multiple compared to comparable restaurant deals and exceeded many industry analysts' expected valuation ranges for the business, particularly taking into account Red Lobster's deteriorating performance. Replacing the entire Darden Board, as Starboard is seeking to do, could be significantly destabilizing to the Company and could jeopardize the Board's current commitment to its $2.20 per share annual dividend."
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November 12, 2015
07:14 EDTDRIDarden sales trends outperforming, says Oppenheimer
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