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Clarence Otis

Darden Restaurants to sell Red Lobster chain for $2.1 billion

Darden Restaurants to sell Red Lobster chain for $2.1 billion

Darden Restaurants Inc. has agreed to sell its Red Lobster seafood chain to San Francisco private equity firm Golden Gate Capital for $2.1 billion, flouting the warnings of some of its shareholders. The all-cash deal will allow Darden to focus more on reviving its troubled Olive Garden chain. Activist investor Starboard Value in February publicly called Darden's plans to sell or spin off Red Lobster's 705 units a "potential destruction of shareholder value." After tax and transaction costs, the Red Lobster sale will leave Darden with $1.6 billion. The Orlando, Fla., company plans to use $1 billion to retire outstanding debt and as much as $600 million to fund a new...

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