Starboard To Seek Darden Shareholders Meeting On Red Lobster Spin-off Plan: WSJ

(RTTNews) - Starboard Value LP is expected to launch on Monday a plan that would have shareholders vote on a resolution telling Darden Restaurants Inc. (DRI) to halt any plans to spin off its Red Lobster unless they get to vote directly on the decision, the Wall Street Journal reported citing a letter Starboard plans to send to shareholders on Monday.

Given the timing of Darden's annual meeting, where such a vote would typically be held, Starboard decided to call for the special meeting in what's known as a consent solicitation, the Journal said citing the letter. Starboard must win the support of more than 50% of the shareholders in the next 60 days to hold the special meeting.

If the special meeting happens, Starboard would ask shareholders to vote on a nonbinding proposal urging Darden not to approve any Red Lobster plan without a shareholder vote, the paper said quoting the letter. Starboard has been pushing the restaurant operator to spin off more than just the Red Lobster chain.

Last month, Starboard, which owns a 5.5 percent stake in the company, had expressed its serious concerns with a proposed separation of Red Lobster, and urged Darden Restaurants's board to delay the Red Lobster separation and immediately conduct a comprehensive evaluation of all alternatives to maximize shareholder value. Starboard had said that it did not believe the proposed plan to spin-off or sell Red Lobster, by itself, is in the best interest of shareholders.

Starboard had noted that it believed Red Lobster separation would impair the company's ability to realize full value for the company's substantial real estate holdings and could destroy substantial shareholder value.

In December 2013, Darden Restaurants had announced that it was looking to sell or spin-off its struggling Red Lobster chain.