| Sept 2
Sept 2 Olive Garden owner Darden Restaurants Inc
, in a concession to activist investor Starboard Value
LP, on Tuesday announced a revised slate of director nominees
that includes four new candidates, four incumbents and four open
spots for Starboard picks.
Analysts were divided on whether the move would satisfy
Starboard, one of Darden's largest investors which for months
has lobbied for major change at the underperforming company,
and prevent it from seizing control of the entire 12-member
Orlando-based Darden earlier this summer had nominated nine
incumbent directors and left three spots open for Starboard
Charles Ledsinger Jr., Darden's non-executive chairman, said
in a statement that the revised slate provides investors with
both fresh perspectives and continuity.
"Starboard is seeking effective control of the company,
representation which is disproportionate to Starboard's
approximate 8.8 (percent) stake in Darden," said Ledsinger, who
is not seeking re-election.
"This slate avoids many of the risks and destabilization
that would result from full board turnover and giving control to
a single shareholder's nominees," Ledsinger said.
KeyBanc Capital Markets analyst Christopher O'Cull said the
move "will appease existing shareholders."
That view was not universal.
"We continue to believe the activists are likely to gain a
majority of board seats, which if it happens, should be a
meaningful catalyst for change," Janney Capital Markets analyst
Mark Kalinowski said in a note to client.
Shares in Darden were up 1 percent to $47.80 in midday
trading on the New York Stock Exchange.
Darden last month announced that Clarence Otis would step
down as chief executive officer and chairman, amid pressure from
Starboard and fellow activist investor Barington Capital Group
Starboard last week reiterated its call for a full
replacement of Darden's board and criticized the company for
"unnecessarily delaying" its annual shareholder meeting from to
Oct. 10 from Sept. 30.
Starboard, Barington and other investors were particularly
frustrated by Darden's rebuff of a recent shareholder vote
calling for a special meeting to debate the merits of Darden's
then-pending $2.1 billion sale of Red Lobster.
Starboard's nominees include Starboard CEO Jeffrey Smith and
Brad Blum, who is credited with reviving Darden's flagship Olive
Garden chain during his stint as president of that brand from
1994 to 2002. Representatives from Starboard were not
immediately available for comment.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Leslie