DISMANTLING DARDEN, PART II

Takeaway: Barington filing on DRI represents the tip of the iceberg!

As many of you know, about six months ago we identified an opportunity at Darden that we believed could create significant value for shareholders.  We have been diligent in our work on Darden since that time and have periodically released research notes on the topic.  The most recent note, “Dismantling Darden”, can be accessed here.  To rehash, we believe there is an opportunity to take full advantage of some low-hanging fruit and improve profitability.  In our view, Darden is a strong, proven company that is in dire need of a major overhaul.  We have previously acknowledged the following positive attributes of the company:

  • Tremendous cash flow potential
  • Massive real estate value
  • Non-core, underutilized assets that can be sold at a rich valuation
  • Core assets represent a classic reorganization opportunity
  • Market’s valuation of the whole is far below what we believe the sum-of-the-parts would represent in a reorganization or breakup
  • G&A rationalization opportunities

Based off of our sum-of-the-parts analysis, we believe the parts are greater than the whole, at Darden.

 

We have pursued this topic extensively and have put together a 30 page Black Book, highlighting Darden’s inefficiencies and what our plan would be in order to turn the company around.  Please contact to access this research.

 

 

 

Howard Penney

Managing Director