Starboard enters into cooperation agreement with Bloomin' Brands (BLMN)
Key Summary: In Jan 2024, Starboard reached agreement with Bloomin' Brands. In April 2020, Jana Partners added two directors thro' agreement. In Feb 2018, Barington Capital suggested value-boosting recommendationsMarket Cap: $2.4 billion | Bloomin' Brands, Inc. is a holding company. The Company owns and operates casual, upscale casual and fine dining restaurants.
Background
On August 18, 2023, Starboard initiated a 9.9% active stake in the company.
On October 17, 2023, Starboard delivered a presentation at the 2023 Capitalize for Kids Investors Conference highlighting value creation opportunities at the company. Starboard has proposed a turnaround plan for the company which includes focusing on improving the operations and marketing of Outback Steakhouse, which has seen declining traffic. Starboard also suggested making Outback's marketing more fun and highlighted the potential of its growing business in Brazil. Additionally, the investor sees growth opportunities in smaller brands within Bloomin's portfolio, such as Carrabba's, Bonefish, and Fleming's. Starboard's goal is to unlock value for shareholders, similar to its successful strategy with Darden Restaurants in the past.
Update
On January 2, 2024, the company entered into a cooperation agreement with Starboard (9.7%) and pursuant to it, the company appointed Dave George, former Chief Operating Officer of Darden Restaurants, and Jon Sagal, Partner at Starboard Value LP, to its Board. The company also established an Operating Committee, chaired by Dave George, to focus on corporate and operational improvements. Jon Sagal, along with current directors Mike Mohan and John Mahoney, will be members of this committee.
Past
(i) Jana Partners
On April 8, 2020, Jana Partners and the company entered into a cooperation agreement and pursuant to it, they announced that the Company added two new independent directors recommended by Jana Partners to its Board effective July 1, 2020.
(ii) Barington Capital
On February 21, 2018, Barington Capital sent a letter and a detailed presentation to the Chairman and CEO, recommending that the company implement various measures to improve long-term value. It stated its belief that the company could address its challenges by taking the following steps:
(a) Spun off its smaller brands (Bonefish Grill, Carrabba’s, and Fleming’s) into a new company, leaving Outback to operate independently, to improve strategic focus and operating execution at each brand.
(b) Enhanced the guest experience to increase revenues and improve customer loyalty.
(c) Reduced excessive expenses, including advertising and corporate overhead.
(d) Improved the Company’s corporate governance and the composition of its board of directors.
Valuation Insight
Barington was convinced that the company’s intrinsic value per share was well above its current market price and believed that if the company effectively executed its recommendations, the value of the company’s stock could increase to approximately $41 per share.
Barington’s letter and presentation to the Company are available at