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Barington Group Calls Darden Restaurants' Plan To Enhance Shareholder Value Incomplete And Inadequate

NEW YORK, Jan. 13, 2014 /PRNewswire/ -- Barington Capital Group, L.P., which represents a group of shareholders that owns over 2% of the outstanding common stock of Darden Restaurants, Inc. (NYSE: DRI), today issued the following statement regarding Darden's recently announced plan to enhance shareholder value:

As significant shareholders of Darden, we are disappointed with the plan the Company announced on December 19, 2013.  While we appreciate that Darden will be suspending new unit growth at Olive Garden and further reducing expenses as we recommended, we view the overall plan as incomplete and inadequate. 

In particular, we are disappointed that Darden's plan fails to take advantage of opportunities to realize substantial value from Darden's extensive real estate holdings.  As noted in our December 17 th presentation, we estimate that Darden's real estate assets are worth approximately $4 billion and believe that the costs associated with unlocking the value of these assets would be vastly exceed by the value created for shareholders.  Not only does Darden's plan fail to pursue these opportunities, it could hinder the Company's ability to monetize its real estate in the future, a prospect that should give all shareholders great pause.  While Darden has stated that "no final decision has been made on the form of the Red Lobster separation," we would strongly object to any transaction that limits the ability to realize the significant value of the Company's real estate assets for the benefit of all Darden shareholders.

Furthermore, we believe that Darden's plan to separate Red Lobster from the rest of the Company fails to do enough to improve management focus and operating execution at Darden's remaining brands.  We are encouraged that the Company has acknowledged that a separation of Darden into two independent companies "will better enable the management teams of each company to focus their exclusive attention on their distinct value creation opportunities."  Unfortunately, following the separation of Red Lobster, Darden will still be left managing seven disparate brands with an infrastructure that we believe is too complex and burdened to compete with its more focused and nimble competitors. 

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