KEY TAKEAWAYS
- Shares of Outback Steakhouse parent Bloomin’ Brands jumped in early trading Wednesday before paring back gains after appointing two new board members as part of an agreement with activist investor Starboard Value.
- Bloomin’ Brands said former COO of Darden Restaurants, Dave George, and Jon Sagal, a a partner at Starboard, would join the board.
- Bloomin’ Brands also formed an operating committee to address performance issues.
Shares of Outback Steakhouse parent Bloomin’ Brands (BLMN) jumped in early trading Wednesday before paring back gains after announcing two new board members.
Bloomin’ Brands said Dave George, former Chief Operating Officer of Darden Restaurants, and Jon Sagal, a partner at Starboard Value, would join its Board of Directors. The appointments, which are effective immediately, are part of an agreement with activist investor Starboard Value, which has a roughly 10% stake in Bloomin’ Brands.
One of the largest casual dining restaurant companies globally, Bloomin’ Brands owns several American chains including Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill. However, it has been falling behind competitors in recent years.
Starboard specializes in streamlining operations and driving margin gains for companies. After a 2014 coup at Darden Restaurants, Olive Garden’s parent company, Starboard wrestled control of the board and reshaped the company’s operations.
“Throughout the course of our engagement with Bloomin’ Brands, we have appreciated the collaborative and open dialogue we have had with members of the Board and management team,” Starboard CEO and Chief Investment Officer Jeffrey Smith said after the announcement.
Bloomin’ Brands also said it would form an Operating Committee of the Board, which will work towards optimizing corporate and operational aspects of the business.
Shares of Bloomin’ Brands were 0.3% lower at $27.22 per share as of about 11:30 a.m. ET Wednesday after surging above $28 per share following the news.