On the Darden Board's Failure to Justify How a Separation of Red Lobster Will Resolve the Company's Operational Issues or Lead to Shareholder Value Creation:
"In our view, the board has also fallen short of justifying that it should be given complete deference with respect to strategic matters or how a spin-off of Red Lobster into a separate company is likely to resolve the operational issues that the brand and Darden face, or how the spin-off would lead to the creation of shareholder value."
On How Darden's Prolonged and Problematic Operational Underperformance
Calls into Question Management and the Board's Judgment Regarding a Red Lobster Separation:
"The Company has clearly underperformed its peers by a significant margin, in our opinion and makes a strong case for investors to question the board's and management's strategic judgment regarding a Red Lobster separation."
On the Board's Inadequate Justification for Pursuing the Red Lobster Separation Rather than a More Rational Plan for Separating Similar Brands Together:
"Thus, if the Company has deemed a separation of its brands as the best strategic course, then we question why the board and management would not pursue a seemingly logical plan of grouping relatively similar brands together. In light of these questions and concerns, as voiced by shareholders and the investor community to the board and management, we believe the board has, up to this point, provided an inadequate justification to shareholders for opting instead to pursue a plan which many view as suboptimal."
On the Reasons Shareholders Should Seriously Doubt Whether Darden is Truly Committed to Shareholder Engagement and to Taking into Account Shareholder Input on the Red Lobster Separation:
"Darden's portrayal of itself as a company that is strongly committed to shareholder engagement, that welcomes shareholder input and that values the views of shareholders rings somewhat hollow, to our ears, considering the Company's corporate governance policies and its track record of dealing with investors and analysts who have been critical of the Company."