Barington Group Calls Darden Restaurants' Plan To Enhance Shareholder Value Incomplete And Inadequate States that it would Object to any Transaction that Limits the Ability to Unlock the Value of the Company's Real Estate Assets

Announces that it will Host an Online Presentation on January 30th

NEW YORK, Jan. 13, 2014 /PRNewswire/ -- Barington Capital Group, L.P., which represents a group of shareholders that owns over 2% of the outstanding common stock of Darden Restaurants, Inc. (NYSE: DRI), today issued the following statement regarding Darden's recently announced plan to enhance shareholder value:

As significant shareholders of Darden, we are disappointed with the plan the Company announced on December 19, 2013.  While we appreciate that Darden will be suspending new unit growth at Olive Garden and further reducing expenses as we recommended, we view the overall plan as incomplete and inadequate. 

In particular, we are disappointed that Darden's plan fails to take advantage of opportunities to realize substantial value from Darden's extensive real estate holdings.  As noted in our December 17th presentation, we estimate that Darden's real estate assets are worth approximately $4 billion and believe that the costs associated with unlocking the value of these assets would be vastly exceeded by the value created for shareholders.  Not only does Darden's plan fail to pursue these opportunities, it could hinder the Company's ability to monetize its real estate in the future, a prospect that should give all shareholders great pause.  While Darden has stated that "no final decision has been made on the form of the Red Lobster separation," we would strongly object to any transaction that limits the ability to realize the significant value of the Company's real estate assets for the benefit of all Darden shareholders.

Furthermore, we believe that Darden's plan to separate Red Lobster from the rest of the Company fails to do enough to improve management focus and operating execution at Darden's remaining brands.  We are encouraged that the Company has acknowledged that a separation of Darden into two independent companies "will better enable the management teams of each company to focus their exclusive attention on their distinct value creation opportunities."  Unfortunately, following the separation of Red Lobster, Darden will still be left managing seven disparate brands with an infrastructure that we believe is too complex and burdened to compete with its more focused and nimble competitors. 

As illustrated in our December 17th presentation, Darden has significantly underperformed its peers as the Company has struggled to manage its eight brands.  We fail to see how the Company's performance will be much different managing seven.  We therefore continue to recommend that the Company separate Olive Garden from its higher-growth brands.  Given the extensive list of benefits that Darden has stated will be achieved from the separation of Red Lobster, we think that it is only logical that Darden should do the same with respect to its largest brand that accounts for over 40% of the Company's revenue.

Unfortunately, Darden's proposed plan appears to us to be more of an attempt to do the minimum necessary to maintain the status quo than an effort to formulate a truly comprehensive strategy to improve long-term shareholder value.  We are convinced that Darden can and should be doing more to improve value for its shareholders.

We intend to host an online presentation on January 30, 2014 to discuss our recommendations to improve shareholder value at Darden and our concerns with the Company's proposed plan.  Further details of our presentation will be announced later this month.

About Barington Capital Group, L.P.

Barington Capital Group, L.P. is an investment firm that, through its affiliates, manages a value-oriented, activist investment fund that was established by James A. Mitarotonda in January 2000.  The Fund invests in undervalued publicly traded companies that Barington believes could appreciate significantly in value as a result of a change in corporate strategy or from various operational, financial or corporate governance improvements.  Barington's investment team, senior advisors and industry contacts are seasoned operating specialists, experienced in working with companies to design and implement initiatives to improve their financial and share price performance.  Barington is a frequent investor in branded consumer focused companies, with prior investments in companies such as Lone Star Steakhouse, Dillard's, Warnaco, The Jones Group, Pep Boys, Steven Madden and Nautica.

On December 17, 2013, Barington released a detailed presentation setting forth its recommendations to improve long-term shareholder value at Darden.  The release followed a month-long independent review of Barington's recommendations by Houlihan Lokey, the Barington Group's financial advisor.  The presentation can be found on Barington's website at http://www.barington.com/press-releases.html.

SOURCE Barington Capital Group, L.P.



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