The special meeting has to be called as Starboard got consent from
54 percent of the shareholders of the largest U.S. full service
restaurant operator, CNBC said, citing sources familiar with the
Darden shares were up 3.2 percent at $49.76 in afternoon trading on
the New York Stock Exchange, valuing the company at more than $6.5
The company said in December that it planned to spin off or sell the
705-restaurant Red Lobster seafood chain, and said at the time that
the transaction would not require a shareholder vote.
Starboard, which owns 5.5 percent of Darden, has urged Darden to
delay its plans to spin off the chain, saying it could destroy as
much as $800 million of shareholder value.
Starboard's Chief Executive Jeffrey Smith has asked the company to
consider other options to boost value, including slashing operating
costs, improving restaurant results and divesting real estate.
"The Red Lobster separation doesn't make a lot of sense," Smith said
on CNBC's Squawk on the Street show on Tuesday.
"Shareholders are voicing their opinions very strongly that they are
not in favor."
"We have not received notice from Starboard," Darden said in an
emailed statement on Tuesday.
Starboard was not immediately available for comment.
[to top of second column]
Darden's plan followed a proposal from another investor Barington
Capital Group to split the company into two — one with the mature
Olive Garden and Red Lobster chains and the other with brands such
as LongHorn Steakhouse and Seasons 52.
Darden has so far resisted pressure to put the fate of the
floundering chain to a shareholder vote, saying other alternatives,
including those suggested by Starboard and others, were not viable.
Darden reported in March that same restaurant sales at Red Lobster
tumbled 8.8 percent in the quarter ended Feb 23.
Customer visits at the chain fell in the double-digit percentages in
each month of the quarter, chalking up nine straight months of
(Editing by Savio D'Souza)
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