Activist investor wins control of Darden's board
Source: AP-EXCITE
By CANDICE CHOI
NEW YORK (AP) An activist investor has won all 12 seats on the board of Olive Garden's parent company Darden Restaurants, according to preliminary results announced by the company.
Starboard Value was seeking to replace the entire board with its own nominees at the company's annual meeting Friday. The hedge fund has criticized Darden's management of Olive Garden, as well as how the company handled the sale of Red Lobster.
Both Olive Garden and Red Lobster suffered declining sales in recent years, and Darden's management has acknowledged the need for changes. The company has been trying to update the menu and marketing for Olive Garden and noted there have been signs of improvement, including a slight bump in sales for September.
At the meeting in Florida, Starboard CEO Jeff Smith stood to introduce himself and the new board members before voting results had been announced. Smith noted Starboard has already begun "to work with the management team to ensure a seamless transition."
FULL story at link.
Read more: http://apnews.excite.com/article/20141010/us--darden-board_control-822da23c90.html
LynneSin
(95,337 posts)So basically it wants to use cheaper quality soup bases and make sure their employees really can't earn a living working at their company.
Seriously just shut down the company now because already Olive Garden is like the worst chain restaurant out there and this new guy wants to do everything possible to make it even worse!
Erose999
(5,624 posts)renting property that they formerly owned. This is the kind of fuckery Bain Capital is known for. I'm sure they'll cut benefits, cut full timers, layoffs, etc as well. They'll squeeze every penny out of OG they can turn into profit until they've ran it into the ground, and then sell off the assets.
Dreamer Tatum
(10,926 posts)You should read the document. It is illuminating.
Erose999
(5,624 posts)property. Spinning off the real estate would mean forming a holding company that owns the real estate and then selling that off. They'd be renting instead of owning.
I've read the document, and it's "illuminating" that shareholders in the company are acknowledging things that casual observers have been saying for years. It seems like the document is part of a ploy for these corporate raiders to drive down share price and buy out the majority shareholders cheap. Which they did. Now they can start cutting corners and selling off assets to make a quick buck.
Dreamer Tatum
(10,926 posts)I don't see it.
I don't think you read the document at all. It is all about returning shareholder value by making the
place decent to eat at again. Right now it stinks (literally) and they've completely lost their way.
I don't see how you can call Starboard "raiders" when they're specifically critiqued raider-like behavior of current
management and have identified new management with records of returning value. Moreover, the company has
layers and layers of worthless middle management. Getting rid of them enhances value and allow them to
invest in the people on the front lines. It's all in the document.
Erose999
(5,624 posts)restaurant business.
Dreamer Tatum
(10,926 posts)Their ability to obtain capital, for instance, is based on their balance sheet. Commercial real estate
crashed, of course, which had a material effect on the value of their holdings, which certainly
affected cost of funds. There are also insurance and tax matters to worry over, and in fact that
is part of the bloat of the company. If they had just a couple of properties, I could see it, but a national
portfolio? Not so sure.
cprise
(8,445 posts)...they announced their intentions to undermine Obamacare by changing work hours and such.
littlewolf
(3,813 posts)was actually make things better. you know like paying people enough
and using better ingredients. Silly me.
Lucky Luciano
(11,237 posts)Examples:
Carl Icahn
Daniel Loeb
Nelson Peltz
Gordon Gekko.
Scruffy Rumbler
(961 posts)cprise
(8,445 posts)beyond merely sticking up for shareholder financial interests.
Dreamer Tatum
(10,926 posts)Might learn something.
jmowreader
(50,419 posts)I went to the article linked in the OP looking for it, and it's not there.
gvstn
(2,805 posts)They haven't gotten to this most recent development yet, but seem invested in this story and some of their earlier posts might give some background for those interested. Most are more informative than average Buzzfeed articles.
http://www.buzzfeed.com/search?q=darden
Demeter
(85,373 posts)matt819
(10,749 posts)Employees will be fired. Lots of financial manipulation to benefit Starboard exclusively. Sale of Darden real estate. Quality will suffer (even more). Employees and management will be squeezed dry. Give it maybe 3 years and Darden restaurants will be shut down, leaving empty shells across the US.
Capitalism. Ain't it wonderful?
blkmusclmachine
(16,149 posts)with.
NOT!