Starboard Value L.P. in New York City increased its ownership in Orlando-based Darden Restaurants Inc.to 7.1% and criticized its planned $2.1 billion sale of the Red Lobster chain.
Darden is the parent company of Irvine-based casual dining chain Yard House Inc. USA.
Starboard Managing Director Jeffrey Smith said reaction to the planned sale of Red Lobster has trimmed Darden’s market capitalization by $1 billion over the past two months. The investor also said the proposal violates Darden’s “core values” of affordable quality food, said industry trade publication Nation’s Restaurant News.
He wants Darden’s board replaced by his slate of nominees at a September 30 annual meeting. New York City-based investor group Barington Capital Group L.P. reportedly has joined with Starboard in this push.
Nation’s Restaurant News recently reported Yard House as the second-fastest growing restaurant chain in the country, with sales up 20% systemwide last year, to $406 million.
The Business Journal’s recent list of Orange County-based restaurant chains ranked Yard House No. 6, with an estimated $370 million in sales last year.
Yard House, which is noted for its craft beers, broad menu and lively atmosphere, currently has 52 restaurants and is poised for more growth under owner Darden Restaurants Inc.
Darden bought Yard House for $585 million two years ago.
It has seven locations locally.
