The water is getting hotter for the parent of Red Lobster.
An activist hedge fund has secured votes from 54 percent of Darden Restaurants’ shareholders to hold a special meeting to block plans to sell or spin off Red Lobster into a separate company, sources said.
Starboard Value LP, the New York-based fund spearheading the campaign against the Red Lobster spinoff, argues that Darden, which also owns chains like Olive Garden and Capital Grille, should instead spin off its real-estate holdings.
Starboard, which owns 5.5 percent of Darden shares, has secured votes from “some of the largest institutions that own Darden” stock, said a source close to the situation.
Darden said the vote to call a special meeting, which Starboard organized with the help of proxy solicitor Okapi Partners, doesn’t mean shareholders are prepared to oppose a spinoff of Red Lobster.
“Shareholders have told us that while they may support the calling of a special meeting, they have not decided on how they will vote at the meeting itself,” the company said in a statement.
Even if Starboard wins the special meeting, it could end up waiting a while. That’s because Darden, which is incorporated in Florida, is allowed under the state’s laws to wait 60 days to set a date for the meeting and another 60 days to hold it.