New York-based activist hedge fund firm Starboard Value has offered to set up a meeting with an employee advocate for Darden Restaurants to discuss Starboard’s turnaround plans regarding Darden, in which it is a shareholder, according to a Darden employee group. The group, which calls itself “Dignity at Darden,” said that Starboard e-mailed its leader, Steve Gazzo, who started the “Darden: We Want a Seat at the Table” petition. In a press release, Gazzo said he and fellow “Dignity At Darden” leaders are interested in meeting and are seeking support from another worker-oriented group, Restaurant Opportunities Centers United.
“Darden workers are currently awaiting a response from Starboard Value,” the press release states. “No such offer to meet and hear employees’ concerns has been proffered by Darden Restaurants Inc. management.” According to the press release, employees are concerned about Starboard’s recent 300-page plan for turning around the Olive Garden restaurant chain, which they fear will lead to thousands of layoffs.
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Thomas Sandell’s Sandell Asset Management said in a regulatory filing that it has been contacted by a private equity firm that is interested in doing a deal for Bob Evans’ food products division, BEF Foods, and has also heard from several investment firms interested in the company’s real estate. Sandell also said that “certain of these firms” also expressed interest in providing financing for a “change of control or acquisition” of the company. Sandell said in the filing it may discuss these matters with management, the board or other shareholders.
In a phone interview, Thomas Sandell said most of Bob Evans’ peers have done some sort of sale-leaseback with their real estate or gone to a franchise model. However, he stresses that he has no intentions of his fund taking a stake in one of these transactions, emphasizing that he does not invest in private businesses. “We have a liquid hedge fund structure,” says Sandell. His firm is one of the largest shareholders of Bob Evans, with a 9.2 percent stake. The stock jumped about 4.2 percent on the news. Last month four of Sandell’s nominees were voted to Bob Evans’ 12-person board of directors at the restaurant and packaged foods chain’s annual meeting.
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Avenue Capital Group is the latest hedge fund firm to raise money for a public vehicle. The New York firm, founded by Marc Lasry and his sister Sonia Gardner, said it plans to sell 20 million shares at £10 each for Avenue Capital Credit Opportunities, which will buy direct loans to European companies, distressed debt and other “undervalued opportunities,” according to a Bloomberg report. Altogether, it figures to raise 200 million pounds, or $328 million. The fund will have an annual dividend target of 5 percent, according to the report, citing a statement made by Avenue to the London Stock Exchange, where the fund will list.
