Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

This public program was initiated in collaboration with The Conference Board Task Force on Corporate/Investor Engagement and with Thomson Reuters support of communication technologies. The Forum is providing continuing reports of the issues that concern this program's participants, as summarized  in the January 5, 2015 Forum Report of Conclusions.

"Fair Access" Home Page

"Fair Access" Program Reference


Related Projects 2012-2019

For graphed analyses of company and related industry returns, see

Returns on Corporate Capital

See also analyses of

Shareholder Support Rankings


Forum distribution:

Short-term benefits of activist proposals same for long term strategies as for liquidation


The following Wall Street Journal chart of five day trading activity shows the immediate 7% market reaction to news of a 2.8% activist position reported in the article below:


Source: Wall Street Journal, October 9, 2013 article



Activist Pushes for Split of Darden Restaurants

Barington Capital Wants to Separate Red Lobster, Olive Garden From Rest of Company

An activist investor is hungry for change at Darden Restaurants Inc.

Hedge fund Barington Capital Group LP, along with other investors, has taken a 2.8% stake in Darden, the owner of Olive Garden, Red Lobster and six other restaurant chains. The fund is pushing for Darden to form two separate companies, among other changes, according to people familiar with the matter.

New York-based Barington has held talks with the restaurant operator's management. The investor group argues that Darden should create one company with its Olive Garden and Red Lobster restaurants, and another with its higher-growth chains, which include Capital Grille, the people said.



It isn't clear what other investors are in the group, which also has urged the company to reduce costs faster than it already is and to try to cash in on its real estate. Based on Darden's current market value of about $6.47 billion, the group's stake is worth roughly $181 million.

"We believe that Darden has the potential to deliver significantly higher returns to shareholders," said a Barington spokesman.

A spokesman for Darden said the company "welcomes input on enhancing shareholder value," adding that its board "will take the time necessary to thoroughly evaluate Barington's suggestions, just as the company does for any of its shareholders."

Based in Orlando, Fla., Darden has more than 2,100 restaurants in North America, which, in addition to the other chains include the LongHorn Steakhouse, Yard House, Eddie V's Prime Seafood, Seasons 52 and Bahama Breeze brands. The company owns the land at more than 1,000 of its restaurants, according to financial filings. Other companies have extracted value from their real estate by creating real-estate investment trusts or using sale-leaseback transactions.

Darden has been hurt by economic weakness as some consumers shift to lower-priced fast-food restaurants, while others gravitate toward competing chains like Chipotle Mexican Grill and Potbelly that don't have table service and therefore offer the prospect of quicker meals—and no tips.

At Olive Garden—Darden's biggest chain by revenue—same-restaurant sales dropped 4% in the first fiscal quarter, while they fell 5.2% at Red Lobster.

The company also has been hit with higher food and labor costs. During its most recent earnings call, Darden said that it would aim to save about $50 million annually.

Reflecting the challenges the company faces, its stock price had fallen about 15% over the past 12 months. It was little changed at $46.35 around midday Wednesday before surging more than 6% on The Wall Street Journal's report of the Barington group's stake.

In its most recent quarter, Darden's overall sales grew 6.1% to $2.16 billion, and the company posted a $70.2 million profit. Sales at its higher-end chains have been more robust as well-off consumers continue dining at upscale restaurants. Same-store sales at Darden's higher-end chains rose 0.5% in the quarter.

Barington was co-founded in 1992 by James Mitarotonda , and was named for Bari, Italy, near where he was born. Mr. Mitarotonda, now the fund's chairman, president and chief executive, had previously worked in the retail and financial-services industries, and participated in the retail-management executive training program at Bloomingdale's, according to Barington's website.

Barington's portfolio has around a dozen companies at any given time. Earlier this year the hedge fund built up a stake in Jones Group Inc., pushing for the retailer to reduce costs, add directors and sell parts of its portfolio. Jones is now in the late stages of an auction of the entire company, according to people familiar with the matter.

In 2006, the fund contacted apparel maker Warnaco Group Inc.'s management and suggested that the company sell non-core brands and reduce expenses. Warnaco later sold its Anne Cole, Ocean Pacific and other brands.

—Julie Jargon contributed to this article.

Write to Dana Mattioli at

Copyright ©2013 Dow Jones & Company, Inc. All Rights Reserved



This Forum program was open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the purpose of this public Forum's program was to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant was expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated in 2012 in collaboration with The Conference Board and with Thomson Reuters support of communication technologies to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices. The website is being maintained to provide continuing reports of the issues addressed in the program, as summarized in the January 5, 2015 Forum Report of Conclusions.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.