Darden Shareholders Elect Entire Starboard Slate Of Nominees To Board

(RTTNews) - Darden Restaurants Inc. (DRI) said Friday that based on preliminary results, its shareholders have elected all twelve directors nominated by activist investor and the company's key shareholder, Starboard Value L.P., to the company's board.

The election of Starboard Value's nominees marks a victory for the hedge fund in its proxy battle with the full-service restaurants operator. Starboard Value, which has beneficial ownership of about 8.8 percent of Darden's shares, had sought to replace the company's entire board with its own nominees.

The twelve Starboard-nominated directors elected at the annual shareholders meeting are Betsy Atkins, Margaret Shan Atkins, Jean Birch, Bradley Blum, Peter Feld, James Fogarty, Cynthia Jamison, William Lenehan, Lionel Nowell, III, Jeffrey Smith, Charles Sonsteby, and Alan Stillman.

The hedge fund had released a detailed transformation plan for Darden, including raising the EBITDA and company-wide operational improvements.

The activist investor said in April that Darden's plan to spin off the Red Lobster chain was the wrong spin-off, at the wrong time, and for the wrong reasons.

The hedge fund's transformation plan for Darden also envisaged company-wide operational improvements, a turnaround plan for Olive Garden, a value enhancing strategy for Darden's real estate assets and a new franchising program.

According to Starboard Value, these improvements, along with a separation of Darden's brands and real estate, can increase the company's stock price to $67 to $86 per share, even before implementing the Olive Garden turnaround plan or franchising initiatives.

Two proxy advisory firms, Institutional Shareholder Services or ISS and Glass Lewis & Co. LLC, had both recommended that Darden shareholders vote in favor of Starboard Value's twelve board nominees.

Orlando, Florida-based Darden had urged its shareholders to vote for all of its eight independent director nominees, while leaving four seats to be filled by Starboard Value's candidates.

Darden's board had warned shareholders that it would be appropriate to consider the independence and experience of all twelve of Starboard Value's director nominees, given their role in the hedge fund's efforts to take effective control of the company.

Speaking on behalf of Darden's newly elected Board, Jeffrey Smith, chief executive officer of Starboard Value, said, "Darden's future is bright. The new Board is prepared and excited to immediately begin working alongside Darden's management team to put Darden on track for long-term value creation for all shareholders."

Darden noted that the preliminary vote count following the annual meeting also indicated that its shareholders have voted for the approval, on an advisory basis, of the company's executive compensation.

In addition, Darden's shareholders have voted in favor of ratification of the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending May 31, 2015, and also in favor of a management proposal to amend the company's bylaws to provide for proxy access.

However, the shareholders voted against two shareholder proposals as described in the company's associated proxy statement.

DRI is trading at $49.35, up $0.08 or 0.16 percent on a volume of 861,358 shares.