Olive Garden, the world’s largest Italian dining concept, must feel like a junior cook in Gordon Ramsey’s kitchen. Activist hedge fund Starboard Value has been pummeling the chain’s ownership, Darden Restaurants, with changes that it feels the company needs to make in increase revenue and/or cut expenses.
Starboard released a 204-slide deck of suggestions for Olive Garden, detailing everything from board nominees to salting the pasta water. Starboard even suggests that the concept eliminate the unlimited breadsticks program, saying that doing so could cut $5 million in waste.
Olive Garden, for their part, hasn’t taken the hits sitting down. The company has fought back by pointing out that Starboard has built their offense with the help of former restaurants executives with a mixed track record of success. Darden also says that many of the suggestions Starboard makes are items Darden already is implementing or has in the pipeline for the concept.
Darden and Starboard have been at war since late last year and are approaching a vote that will determine which side controls the board. For its part, Starboard has nominated 12 new directors–including the longest-tenure CEO of Olive Garden, Brad Blum–to completely replace the current board. Furthermore, Starboard is suggesting that Darden actually separate out the Olive Garden and LongHorn Steakhouse brands from the full portfolio in order to boost share value, which Darden denies would be the case.
To read more, click here. For the Starboard presentation, click here, and for Darden’s response, click here.