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Darden CEO To Resign; Company Nominates 3 Starboard Directors

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Darden Restaurants (NYSE: DRI) gained five percent after-hours when the company said three of its 12 directors will represent dissident shareholder, Starboard Value L.P.

The press release from Darden also disclosed the company's Chairman and CEO, Clarence Otis, will be stepping down from each role, effective immediately as chairman and no later than December 31 as CEO.

Otis commented, "I am proud to have been a part of Darden's significant growth and expansion, which has enabled us to reach new consumer segments and markets and create significant long-term shareholder value. With the Red Lobster sale complete and progress on our Olive Garden brand renaissance and other strategic priorities underway, this is the right time for me to step down.

"I am confident [the company], under the leadership of our Board and management team, will continue to make progress on the actions we are taking to reinvigorate restaurant performance and further enhance shareholder value."

Darden's Board announced Charles Ledsigner, Jr. will fill the role as Non-Executive Chairman. Ledsinger is currently Darden's Independent Lead Director.

Darden still may face a proxy fight with Starboard, a 6.2 percent holder, which has nominated a full slate of directors to the board.

An annual meeting date hasn't been scheduled although it was held last year in September.

Despite settlement talks with Darden, it's "been unable to reach an agreement with Starboard," Darden said, adding that it "remains interested in a mutually acceptable resolution."

Starboard and allied shareholder Barrington Capital seek to sell or spin off Darden's real estate and number of Darden's restaurant chains, which include Longhorn Steakhouse and Olive Garden.

Darden agreed earlier this year to sell its Red Lobster chain for $2.1 billion, a price Starboard said is too low.

Ledsinger, Jr. said in a statement Monday that the company is 'committed to taking all appropriate steps to serve the interests of Darden and all Darden shareholders."

Goldman Sachs and Morgan Stanley are serving as Darden's financial advisors.

Darden changed hands recently in after-hours trading at 47.06 up 4.76 percent.

Posted-In: Clarence Otis Starboard ValueNews Asset Sales Legal Management After-Hours Center


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