Financing

Starboard Value takes a stake in Bloomin' Brands

The activist investor, which once won every seat on the Darden Restaurants' board, now owns nearly 10% of the Outback Steakhouse parent.
Bloomin
Starboard sees an opportunity in Tampa-based Bloomin' Brands. | Photo: Shutterstock

Starboard Value has set its sights on Bloomin' Brands.

Since July 31, the activist investor has amassed a nearly 10% stake in the owner of Outback Steakhouse and other chains, according to a federal securities document filed Friday, signaling that it will attempt to influence company leadership.

New York City-based Starboard has had success with this strategy in the past. In 2014, it convinced shareholders of Darden Restaurants to overhaul the company's board in the most infamous proxy victory in industry history. It also took a friendlier, $200 million stake in Papa Johns in 2019, a deal considered instrumental in that chain's turnaround. 

In Bloomin', it sees a company that is underperforming relative to its actual value. The Tampa-based Bloomin' is one of the largest casual-dining operators in the U.S., with more than 1,000 locations across the Outback, Carrabba's, Fleming's Prime and Bonefish Grill brands.

Those brands have been outpaced by larger competitors like Olive Garden and Texas Roadhouse coming out of the pandemic. In the second quarter, same-store sales at the 700-unit Outback rose just 0.6%, and traffic was down 4% across all of Bloomin's properties. 

An an activist, Starboard will put pressure on Bloomin' to do things to improve its performance and its share price. That could include changing its leadership or making acquisitions or sales, per the filing.

Bloomin' shares were up about 25% year to date but had fallen more than 3% early Friday. The shares were up more than 9% in premarket trading Friday.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Pricing has driven restaurant sales growth for the past 2 years

The Bottom Line: Restaurant sales have grown for most of the past two years. But they haven't kept pace with menu price inflation, suggesting the industry is saturated again.

Food

Restaurants can learn some foodservice tricks from supermarkets

State of the Plate: Nancy Kruse, RB’s menu trends columnist, says grocers are stepping up their game, and restaurants need to keep up.

Financing

So you are opening a restaurant in a Walmart? Good luck with that

The Bottom Line: The retail giant is adding regional restaurant chains to its stores, giving them some key exposure. But there are some real drawbacks to pay attention to.

Trending

More from our partners