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Starboard Value announced in a 13D filing this morning that it has retained former Olive Garden President Brad Blum to serve as an advisor in its battle against Darden Restaurants.  Starboard will pay $50,000 in cash to Mr. Blum who will, in turn, use the proceeds to purchase Darden stock.

We view this as a favorable development and continue to believe there is the potential for significant shareholder value creation.  I have known Brad since his days at Olive Garden.  In all my conversations about DRI I have made no secret of the fact that I consider Brad uniquely qualified to head up a restructuring and turnaround at the company.  I believe his expertise and experience make him an extremely valuable asset.  A large part of our thesis revolves around the company’s ability to fix the crown jewel: Olive Garden.  We think Mr. Blum could play a critical role in this turnaround and, apparently, Starboard does as well. 

We’ve been publishing extensively on Darden over the past year, including a research note titled “DRI: A Generational Opportunity.”  We continue to believe there is significant upside in DRI as the stock is still trading at a notable discount to its underlying asset value.  The activists recognize this and we believe Starboard’s agreement with Mr. Blum is very bullish for Darden shareholders. 

Howard Penney

Managing Director