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Darden, Starboard in battle over board

NEW YORK (AP) -- Activist investor Starboard wants to replace every director on the board of Darden, the owner of the Red Lobster and Olive Garden chains.

Starboard Value LP detailed its frustration over Darden's proposed $2.1 billion sale of Red Lobster, saying Thursday that the deal was a bad one for the company, in a letter to Darden shareholders. It also criticized what it said was the company's delay in holding a special shareholders meeting. Starboard owns about 6.2 percent of Darden.

The company stood firm in its support of its board in a statement but said that it would “consider the Starboard nominations in due course.”

Starboard and another activist investor, Barington Capital Group LP, have pressed for change at Darden. Barington had challenged Darden's plans to sell Red Lobster, saying the company should separate Olive Garden and Red Lobster as a pair from its other chains, which also include Bahama Breeze, Eddie V's and Yard House.

Darden has said that it believes its Red Lobster deal with investment firm Golden Gate Capital, announced earlier this month, maximizes the value of the business and would help it keep paying a dividend and focus on improving results at Olive Garden.

Olive Garden and Red Lobster have been losing customers in recent years, even as they changed their menus and marketing campaigns to win back business. Part of the problem is the growing popularity of places like Chipotle and Panera, where customers feel they can get the same quality of food without paying as much or waiting for table service.

Shares of Orlando, Florida-based Darden Restaurants Inc. added 87 cents, or 1.8 percent, to $49.56 in morning trading.

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