Darden Clawing at Survival — to Spin off Red Lobster (Dealbook.com)
Darden restaurants announced that it would be spinning off its original franchise, Red Lobster, in an attempt to bolster its share price. Currently, Darden management plans to divest itself of Red Lobster via a tax-free spinoff to investors; however, the Orlando, Fla.-based restaurant chain announced that it would consider a sale if the funds could be raised. The planned spinoff comes after months of pressure from shareholders and analysts about how the company intended to bring diners back to its casual dining facilities. In addition to spinning off Red Lobster, Darden plans on stopping expansion of its Olive Garden chain and slowing down openings of its LongHorn Steakhouse. According to Clarence Otis, Darden???s CEO, ???These actions we???re taking are clearly exciting steps forward for Darden, and we believe these actions enhance our ability to create compelling value for our shareholders.???