Red Lobster on the chopping block

Darden Restaurants, which owns Red Lobster, is bowing to pressure from a hedge fund to divest the chain of seafood restaurants, the New York Times reports.

Read: Global growth boosts hedge funds

It plans to spin off Red Lobster tax-free to its shareholders, but in a statement, Darden says it’s also considering selling the chain outright.

There are 705 Red Lobster locations in Canada and the U.S., with sales of around $2.6 billion this year.

Read: U.S. consumer prices flat

Darden also owns Olive Garden restaurants, and is halting its expansion of the Italian-themed chain, reports the Times.

Barington Capital, the activist hedge fund, would like to see Darden split into as many as three separate companies. A major restaurant company, it also owns American eateries LongHorn Steakhouse and Capital Grille, for a total market value of $6.9 billion.

Read more here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.