Starboard Says Darden Fails To Understand The Fund's Priorities

Starboard Value LP (together with its affiliates, "Starboard"), one of the largest shareholders of Darden Restaurants, Inc. ("Darden" or the "Company")

, with beneficial ownership of approximately 8.8% of the outstanding common stock of the Company, today announced it has responded to a series of misleading statements made by Darden. Jeffrey C. Smith, Managing Member, Chief Executive Officer and Chief Investment Officer of Starboard Value LP, stated, "Unfortunately, Darden continues to get many things wrong. It is, therefore, not surprising that they are also wrong about our priorities as we work hard to vastly improve Darden with the best interests of all shareholders in mind. We, like many of Darden's shareholders, value Darden's attractive $2.20 annual dividend and investment grade rating. We believe that we can not only maintain the dividend and investment grade rating, but that we can also make the dividend safer, hopefully increase the dividend over time, and fortify the investment grade rating. We believe our plans for Darden will result in significant shareholder value creation, while also strengthening the dividend and investment grade rating. On the other hand, we believe the status quo Board and management represent a substantial risk, since we believe they are unable to produce the significant pre-tax and after tax cash flow advantages that we believe our plan will generate. Improving value, protecting and, hopefully, enhancing the dividend, and fortifying the investment grade rating, all require improved, strategy, execution, and cash flow generation. We believe it is abundantly clear that a change in the Board provides all shareholders with the best opportunity to own a stronger and better performing company." Mr. Smith continued, "Further, we find management and the Board's arguments for why they needed to give away Red Lobster instead of listening to their shareholders highly concerning. We believe they basically said that they needed to give away Red Lobster because they didn't know how to improve their own restaurants. Since they were concerned that they couldn't improve Red Lobster, it was easier for them to just give it away. To that we would say, why should we trust them to turn around Olive Garden?" Mr. Smith concluded, "In early September we will be publishing a comprehensive transformation plan for Darden. This plan involves company-wide operational improvements and a turnaround of Olive Garden, along with strategic initiatives including a value enhancing strategy for Darden's real estate assets, a potential spin-off of the company's Specialty Restaurant Group (SRG), and a value-enhancing franchising strategy. We are confident that this plan will protect the dividend and investment grade rating while creating substantial value for Darden's shareholders. In order to implement this plan, however, it is essential that Darden establish strong leadership at the CEO and Board level – leadership with relevant experience, a proven ability to drive results, and a strong commitment to, and respect for, proper corporate governance. We look forward to the responsibility of representing the best interests of the shareholders of Darden."