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
