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.
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.

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