Barington Group says Darden may be worth $71 to $80 per share

Tue Dec 17, 2013 9:40am EST

Dec 17 (Reuters) - Barington Capital Group, an investor pushing for change at Darden Restaurants Inc, on Tuesday released its detailed plan for improving the parent of the Olive Garden and Red Lobster chains.

The report comes after Barington's financial advisor, Houlihan Lokey, reviewed the recommendations.

New York-based Barington, which represents a shareholder group that owns a stake of more than 2 percent in Darden, said in its report that the company might be worth $71 to $80 per share. That would be as much as 73 percent more than its closing price on Oct. 8, before Barington's stake was reported.

Shares of Darden were up 1.2 percent at $52.93 in early trading.

The company, which manages eight restaurant brands, has become too large and complex to compete effectively with its rivals, Barington has said previously.

Barington recommends that Darden split into two companies -one for Olive Garden and Red Lobster, and the other for its higher-growth brands, including LongHorn Steakhouse, Capital Grille, Yard House and Bahama Breeze.

The activist investor also recommends that Darden explore creating a publicly traded real estate investment trust.

Barington said it would share its recommendations with Darden Chief Executive Officer Clarence Otis.

"We are pleased with the results of Houlihan Lokey's independent analysis of our recommendations," said Barington CEO James Mitarotonda. "Their work not only confirms the opportunities we identified to improve long-term shareholder value at Darden, it also adds practical strategies to execute our recommendations and mitigate implementation costs."

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