Darden Issues Letter To Shareholders Regarding Red Lobster Divestiture

(RTTNews) - Darden Restaurants Inc. (DRI) announced Monday that it has filed a presentation with the Securities and Exchange Commission and issued open letter to shareholders to correct a number of inaccurate and misleading statements made by Starboard Value LP and its affiliates as part of Starboard's efforts to take control of the Company by replacing all 12 members of Darden's Board of Directors with its own preferred nominees at the Company's 2014 Annual Meeting of Shareholders.

Darden said that its Board determined that divesting Red Lobster was in the best interests of Darden and its shareholders. Despite numerous actions taken to improve the business, Red Lobster experienced years of declines in guest traffic, resulting in volatile and consistently weakening financial performance that significantly burdened Darden's results. Red Lobster's negative trends were continuing and accelerating at the time its sale was announced in May.

Contrary to Starboard's assertion that it was "rushed," the sale of Red Lobster was the culmination of a robust and deliberate process designed to maximize value and minimize risks associated with continuing to own the business, including the brand's ongoing deterioration, Darden said.

According to Darden, the Red Lobster sale better positions Darden for sustained growth, value creation and consistent return of cash to its shareholders in contrast to Starboard's erroneous claim of value destruction.

Darden stated that it believed that further distraction and costs associated with Starboard's proxy contest are not in the best interests of Darden or Darden shareholders. Accordingly, the company has attempted, on numerous occasions, to reach an agreement with Starboard, and it remains ready to engage with them to resolve this proxy contest.