12:24 pm ET
Sep 12, 2014 |
Deals
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Starboard’s Olive Garden Slides: Salting
the Water, Custom Straws and More |
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By
David Benoit
From the slides:
“The actual dish was barely edible…” |
How do you spice up
an activist fight? Add salt.
Starboard Value LP
filed one of the longest activist slide presentations in recent memory
late on Thursday night, laying out the steps they would take if they
won control of Olive Garden parent
Darden Restaurants Inc.
Nearly 300 pages
cover their 12 board nominees, the performance of Darden, supposedly
lackluster food at Olive Garden and their road map for cutting costs
and breaking up the company.
But Starboard’s
suggestions also
veered into the mundane restaurant kitchen
decisions that are rarely talked about in a boardroom
fight. Because Starboard is seeking full control of the board, it had
to produce a viable plan for what would happen if it took over to
attempt to sway influential proxy-adviser Institutional Shareholder
Services Inc.
Here are some
highlights one may not have considered investor news in the past:
How dare you
stop salting the water for the
pasta? (Slide 164)
The unlimited salad
and breadsticks isn’t being served properly, and therefore is
wasteful. (Slides 104-106)
“To-Go bags are made
with high-end materials adding 25-30% cost above competitors’ To-Go
bags” (Slide 108)
“Darden’s straws are
non-industry length, adding cost for a ‘custom run’ from suppliers.”
(Slide 108)
Why do the to-go
containers need to be dishwasher safe? (Slide 111)
Why is Olive Garden
serving Spanish-style Tapas and Burgers? (Slide 162)
And there are plenty
of pictures of botched Olive Garden food service to look at.
Darden said it is
reviewing the document, which may take some time, but quickly replied
that the company was already doing a lot of the things Starboard
suggested. Darden has already criticized Starboard for building this
plan with former restaurant executives Darden says have a mixed track
record of success. Darden’s full plan, which includes its ideas for
turning around Olive Garden, is
here and its
critique of Starboard is here.
Meanwhile, it’s not
like the populace doesn’t still clamor for Olive Garden. The website
crashed the day they launched the Never-Ending Pasta Pass, which
allows the holder to eat as much pasta as humanly possible, every day,
for seven weeks. (Soda included!)
Starboard’s full plan, including an
FDR-like pledge for the first 100 days, is below. You can click
for a full-screen view at the bottom, using the button to the left of
the page numbers.
[To view the Wall Street Journal
online slides pictured below,
click here.]
[To download the original Starboard
Value presentation,
click here.]
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