NEW YORK — Darden Restaurants shareholders say they aren’t happy with the Orlando, Fla.-based company’s deal with Golden Gate Capital to sell Red Lobster for $2.1 billion.
Barington Capital Group, L.P., a New York-based investment group, which represents Darden Restaurants shareholders, released a statement expressing disappointment that Darden didn’t seek approval from its shareholders before finalizing the sale. “It is unconscionable that the Darden Board would allow the company to sell its Red Lobster business for what amounts to a ‘fire sale’ price after shareholders clearly indicated they did not want the company to enter into a transaction unless it was subject to their approval,” said James Mitarotonda, chairman and CEO of Barington Capital Group, L.P.
Mitarotonda added that shareholders would be better served if the company had spun off Red Lobster instead. “This would provide the Red Lobster business with the focus and attention required to improve its long-term financial performance while preserving the upside of the business for existing shareholders instead of transferring it to a private equity buyer.”