News: Outback Steakhouse’s parent company reduces its gains after adding new members to the board of directors.

Summary

Shares of Bloomin’ Brands, the parent company of Outback Steakhouse, rose in early trading on Wednesday before paring gains after the appointment of two new board members as part of an agreement with activist investor Starboard Value. Bloomin’ Brands announced that Dave George, former CEO of Darden Restaurants, and Jon Sagal, a partner at Starboard, will join the board. Bloomin’ Brands also formed an operational committee to address performance issues.

Details of the News

Shares of Bloomin’ Brands, the parent company of Outback Steakhouse, rose in early trading on Wednesday before paring gains after the announcement of the appointment of two new board members. Bloomin’ Brands announced that Dave George, former CEO of Darden Restaurants, and Jon Sagal, a partner at Starboard Value, will join the board. These appointments, which take effect immediately, are part of an agreement with activist investor Starboard Value, which owns about 10% of Bloomin’ Brands’ shares.

Bloomin’ Brands, one of the largest family restaurant companies in the world, owns several American chains including Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill. However, it has struggled in recent years relative to competitors.

Starboard specializes in streamlining operations and achieving margin gains for companies. Following a 2014 coup at Darden Restaurants, the parent of Olive Garden, Starboard took control of the board and restructured the company’s operations.

“Throughout our engagement with Bloomin’ Brands, we have appreciated the collaborative and open dialogue we have had with board members and management,” said Jeffrey Smith, CEO and Chief Investment Officer at Starboard, after the announcement.

Bloomin’ Brands also announced that it will establish an operational committee for the board, which will focus on improving the corporate and operational aspects of the business.

Shares of Bloomin’ Brands fell 0.3% to $27.22 per share around 11:30 a.m. EST on Wednesday after rising to over $28 per share following the news.

Sources

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Article sources:

• Bloomin’ Brands. “Dave George and Jon Sagal Appointed to Bloomin’ Brands Board of Directors.”
• CNBC. “Activist Starboard has a variety of strategies to build value at Bloomin’ Brands.”

Source: https://www.investopedia.com/outback-steakhouse-parent-bloomin-brands-pares-back-gains-after-adding-new-board-members-8421639