Darden Restaurants inked a $2.1 billion deal on Friday to unload its struggling Red Lobster business to Golden Gate Capital.
Golden Gate may be able to inject some new life into Red Lobster, but the deal is likely to rile up Darden investors. Shares fell nearly 3% in early trading.
Some hedge funds have criticized Darden for how it is handling Red Lobster. Darden originally planned to spin-off the seafood restaurant chain as a separate publicly traded company before deciding to sell Red Lobster to Golden Gate. The sale is not subject to shareholder approval, Darden said.
Earlier this week, activist investor Starboard said it "condemns" Darden for apparently trying to "rush an irreversible and potentially value-destructive Red Lobster sale" without shareholder approval. Starboard owns 5.5% of Darden, recently warned a sale of Red Lobster could destroy up to $800 million of shareholder value.
Read - Red Lobster being sold for $2.1 billion
The reason Red Lobster is failing is because the food and service are terrible. If I wanted to eat some rubber topped with copious amounts of butter and salt, I could do that for a few cents at home, not $30 a person while being disrespected by their staff. Give me fresh, properly cooked and seasoned food, served by staff who act like they want to earn a good tip (as opposed to the "assumed gratuity" argument, or even worse, the "lets create a racist event when a customer doesn't tip" method)... then I might consider eating there again. Until then, nope.
please don't insult seafood by calling this a seafood place... its more a see-food eat it... place.
I do admit though...the biscuits are good...although extremely salty.
The lowest quality frozen seafood offered by a chain. At least Long John Silver's has the marketing sense to keep their frozen food breaded to cover the lack of quality.
But the Cheddar Bay biscuits are the bomb! Diet Coke's good, too.
I remember the days when RL was a great place to eat. The last time I ate there, my water glass had lettuce stuck to it, my fork had dried food on it, & my plate arrived with what looked liked freshly shaved whiskers. Apparently, the cook had just gotten a haircut before work that day & his loose hairs decorated my plate! Of course, the manager offered me a fresh...everything, but, no thanks. He did give me a gift certificate for 2 free meals, but, I haven't been back since. Oh & the gift certificate, yeah, I filed that in the waste basket.
No loss. The last time I ate at one of these (and I ordered steamed, not fried), my belly hated me with a vengeance.
The finest seafood in all the land.
Shareholders had best get ready to open wide and accept the Cheddar Bay Biscuit of value destruction.
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