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  "documentTitle": "Darden Restaurants, Inc. (DRI)",
  "authorId": "03_Starboard_Value",
  "authorName": "Jeffrey C. Smith",
  "documentKindSlug": "shareholder-letter",
  "documentKindLabel": "Shareholder letter",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2014-05-22 00:00:00",
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  "pageNumber": 7,
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  "notes": "This is a text-heavy slide from a shareholder activist letter (likely Barington Capital or similar) criticizing Darden Restaurants' board.",
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      "kind": "callout",
      "text": "MANAGEMENT AND THE BOARD’S FAILURE TO CALL THE SPECIAL MEETING IN A TIMELY MANNER IS AN EGREGIOUS ACT OF SHAREHOLDER DISENFRANCHISEMENT",
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      "text": "Private equity firms routinely participate in due diligence processes to acquire public companies or subsidiaries that require shareholder approval.\nIf posed as a question and given a choice, obviously a private equity firm would prefer fewer closing requirements, such as a shareholder vote. It is the Board's responsibility to demand deal terms and structures that are in shareholders' best interests.\nThe Board did not receive final bids until April 29, 2014. We first raised concerns publicly about the proposed Red Lobster Separation on Dec 23, 2013. We announced our intention to request that Darden call the Special Meeting on February 24, 2014, more than two months before the bid date for Red Lobster. Had Darden been interested in hearing what shareholders had to say, rather than endlessly delaying the Special Meeting in the hopes of rushing through a deal, Darden could easily have called the meeting well in advance of the bid date.\nIf, ultimately, a deal is done at such a low value that it would not receive shareholder approval, why would any board push so hard for such a deal to go through?",
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      "text": "The announcement of the Red Lobster Sale demonstrates that Darden's current Board does not regard upholding shareholder interests as a priority and has been misleading shareholders for an extended period of time. The rationale given in the Red Lobster Sale Presentation for ignoring the validly delivered Special Meeting request from the majority of Darden's shareholders is misleading and demonstrates a clear contempt for the concerns of shareholders. For example, Darden claims that it did not hold the Special Meeting or agree to make the transaction subject to approval because bidders told them this would add uncertainty to the transaction process. This excuse is not even remotely credible, as explained by the New York Times on May 20, 2014, \"Darden also contends that it asked the buyer, Golden Gate Capital, for a shareholder vote on the sale, but that it refused. That position is laughable, of course, because Golden Gate would obviously decline such a vote unless Darden demanded it.\" It is important to note that:",
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      "kind": "paragraph",
      "text": "It is also worth noting that although Darden claimed that they could not pursue any real estate transaction because of debt breakage costs, ironically it appears that with the Red Lobster Sale the Board has chosen to pursue one of the few potential transactions that will actually lead to substantial debt breakage costs.",
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      "text": "these properties are likely worth even more than we originally estimated. As we will detail in future presentations, we now believe the remaining real estate at Darden is worth approximately $2.5 to $3 billion, and opportunities still exist to create substantial value for shareholders by separating this real estate in a tax-efficient manner.",
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      "text": "Darden also contends that it asked the buyer, Golden Gate Capital, for a shareholder vote on the sale, but that it refused. That position is laughable, of course, because Golden Gate would obviously decline such a vote unless Darden demanded it. — New York Times on May 20, 2014",
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      "kind": "title",
      "text": "MANAGEMENT AND THE BOARD'S FAILURE TO CALL THE SPECIAL MEETING IN A TIMELY MANNER IS AN EGREGIOUS ACT OF SHAREHOLDER DISENFRANCHISEMENT",
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