Lobster Fest Not Enough According to Major Investor (BusinessWeek)
Darden Restaurant, Inc.â??s plan to spin off its Red Lobster chain to divest debt wonâ??t be enough to shore up the sagging stock, according to hedge-fund managers at Starboard Value, LP. The group divulged that it holds a 5.6 percent stake in Darden shares yesterday and announced that it will engage in talks with Darden management to see what other measures can be taken to strengthen share price — in addition to the companyâ??s plan for a tax-free spinoff of Red Lobster. Starboardâ??s opinion was seconded by the Burlington Capital Group LP, which holds about 2.8 percent of Dardenâ??s stock. Burlington Capital citied slowing sales momentum and a 13 percent rise in share price â?? with the industry average standing at around 22 percent — as reasons for seeking additional operational changes to the international restaurant chain. So how did this flurry of negative news affect Dardenâ??s share price last week? Not so much, as shares lost only 0.1 percent.