Starboard Value reportedly launches battle to take over Darden Restaurants' board; move comes following Darden's announced sale of Red Lobster chain to Golden Gate Capital

NEW YORK , May 21, 2014 () – One of the activist hedge funds pushing for change at Darden Restaurants plans to take a big swing at the company in the wake of a planned sale of the Red Lobster chain.

The investment firm, Starboard Value, is seeking to unseat the restaurant operator’s entire 12-member board, people briefed on the matter said on Wednesday.

The move comes after Darden announced plans last week to sell Red Lobster to Golden Gate Capital, a private equity firm, for about $2.1 billion. Both Starboard and another hedge fund, the Barington Capital Group, fiercely criticized the deal as a “fire sale” that shortchanged them and other investors.

Darden had announced late last year that it was exploring a spinoff or sale of the seafood chain, a strategy that fell far short of what the investment firms preferred: a more substantial breakup of the restaurant operator.

Starboard had won support for a special shareholder meeting, at which investors would have held a nonbinding vote on the wisdom of a Red Lobster divestiture. But Darden pre-empted the meeting by striking the deal with Golden Gate.

Now the hedge fund is responding by seeking to replace every single director. Among its nominees are Bradley Blum, a former president of Olive Garden, and Charles Sonsteby, a onetime chief financial officer of Brinker International, the parent of Chili’s, one of the people briefed on the matter said.

Starboard owns a roughly 5.5 percent stake.

News of Starboard’s plans was reported earlier by The Wall Street Journal.

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