Red Lobster sold by Darden Restaurants for $2.1bn

Red Lobster sign Dadren operates over 700 Red Lobster locations, which are known in the US and Canada for cheap seafood

Related Stories

Darden Restaurants has sold its struggling Red Lobster chain of seafood restaurants to private-equity firm Golden Gate Capital for $2.1bn (£1.2bn).

Several activist investors have opposed the move.

They have argued for a larger restructuring of Darden, which also owns the Olive Garden restaurant chain.

Profits at Red Lobster have been hit by rising shrimp prices.

Shares in Darden slumped more than 4% on news of the sale.

Darden Restaurants Inc.

Last Updated at 29 Jan 2015, 16:00 ET *Chart shows local time Darden Restaurants Inc. intraday chart
price change %
62.22 +
+1.50
+
+2.47
Endless shrimp

Darden operates 706 Red Lobster locations in the US and Canada, which account for around 30% of its total sales.

The company has said it will use more than $1bn of the proceeds to pay down its debt.

Golden Gate Capital already owns several US dining chains, including California Pizza Kitchen and On the Border, a causal-dining Mexican chain.

Red Lobster has been struggling to attract US diners to its restaurants after the recession curtailed spending. It has also had to stave off competition from Chipotle and Panera, which do not offer table service and are thus slightly cheaper.

The chain has further been impacted by rising shrimp prices as a result of an incurable bacterial infection which has diminished Southeast Asian stocks.

Analysts at Credit Suisse estimated that the increase in price could cost Red Lobster $30m this year.

The chain is known in the US for its "endless shrimp" specials.

More on This Story

Related Stories

More Business stories

RSS

Business Live

  1.  
    06:57: US growth data BBC Radio 4

    US growth figures will be reported later on. What's the likely result, Today asks Ewen Cameron Watt of Blackrock? "The rate of growth is slowing a little bit but not enough to raise serious concerns," he says. Expect a "stable but robust rate of growth."

     
  2.  
    06:45: Greece Radio 5 live
    Greece

    Guntram Wolff is the director of European think tank Bruegel, and he's on 5 live, talking about Greece. "It was a mistake that Greece joined the euro, but it would now be a mistake for it to leave," he says. "We will have to come to a deal that will have a lower burden on Greece. I essentially think you will keep the nominal amount [owed to bond investors] but you will increase the maturity.. from 30 to 40 or 50 years."

     
  3.  
    06:30: Amazon results Radio 5 live

    More from Ewen Cameron Watt of investment manager Blackrock on 5 live. He is giving his views on US results overnight. "Amazon and Google both essentially reported that underlying demand over Christmas was pretty decent," he says. After tax, margins at Amazon are below 1%, he says.

     
  4.  
    06:20: Trademark news Radio 5 live
    swift

    The phrases "this sick beat" and "nice to meet you, where you been" have been trademarked by singer Taylor Swift, 5 live reports. Laura Harper of law firm Shoosmiths says she is trying to stop other people making money by putting the phrases on a t-shirt or other merchandise. She will have to prove the phrases are "synonymous" with her, she says.

     
  5.  
    06:09: Shell results Radio 5 live
    shell

    Ewen Cameron Watt of Blackrock is the markets guest on 5 live, talking about yesterday's results from Shell. "These are very historic results because they reflect an average price of $75" per barrel of oil, he says. Bearing in mind oil is below $50 today, "the pain is yet to come," he adds. The firm has cut $15bn of investments. The longer the price remains at this level, the more likely more investment cuts will come, he says.

     
  6.  
    06:01: House building Radio 5 live

    Figures from the National House Building Council show there was a 9% rise in homes built last year to 145,174, but the rise missed the government's 200,000 home target. Peter Vella of Countryside Properties is on 5 live. NHBC's figures don't take into account all homes started or built, so the industry could be closer to the target than thought.

     
  7.  
    06:00: Howard Mustoe Business reporter

    Good morning all. Overnight, online retail giant Amazon has reported weaker profits for the busy Christmas period. Stay tuned for the best business and economics news and get in touch via email bizlivepage@bbc.co.uk or on twitter @BBCBusiness

     

Features

From BBC Capital

Programmes

  • A person wears a mask at the Vevcani Carnival in MacedoniaThe Travel Show Watch

    The masked Balkan carnival attracting thousands to the streets of Vevcani

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.