Activist Investor Starboard Value Shows Interest in Bloomin’ Brands, Outback Steakhouse Owner
Shares of Bloomin’ Brands, the parent company of Outback Steakhouse, surged 9% in premarket trading on Friday following the disclosure of an activist investor’s interest in the restaurant company. Starboard Value, known for its successful turnarounds in the restaurant industry, now owns 9.9% of Bloomin’s shares, according to a regulatory filing.
Bloomin’ Brands has experienced a slowdown in sales growth in recent quarters. In August, the company reported that its U.S. same-store sales only grew by 0.8% in the second quarter, with a decline in restaurant traffic. Alongside Outback Steakhouse, Bloomin’ also owns Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar.
Despite the sales challenges, Bloomin’ shares have risen by 27% this year, giving the company a market value of over $2.2 billion. It remains uncertain what changes Starboard Value plans to advocate for at Bloomin’ Brands. Previous activist investors, such as Jana Partners and Barington Capital Group, have attempted to pressure the company into cost-cutting measures and spinning off some of its brands.
Starboard Value has a track record of successful turnarounds in the restaurant industry. In 2014, the firm took control of Darden Restaurants’ board and implemented various changes that contributed to increased sales and stock performance, including improvements to Olive Garden’s breadsticks.
More recently, Starboard Value struck a deal with Papa John’s in 2019 to resolve a feud with the pizza chain’s disgraced founder, John Schnatter, and revive declining sales caused by his scandals. Earlier this year, Starboard CEO Jeff Smith stepped down as chairman from Papa John’s board, and the company repurchased most of the investment firm’s shares.
With Starboard Value’s involvement, Bloomin’ Brands may undergo significant changes as the activist investor seeks to leverage its expertise in the restaurant industry to drive growth and improve performance.
How has Starboard Value’s interest in Bloomin’ Brands impacted the company’s premarket trading and overall market value?
Shares of Bloomin’ Brands, the company behind popular restaurant chain Outback Steakhouse, experienced a 9% surge in premarket trading on Friday after it was revealed that activist investor Starboard Value has shown interest in the restaurant company. According to a regulatory filing, Starboard Value now owns 9.9% of Bloomin’s shares.
Bloomin’ Brands has faced a slowdown in sales growth in recent quarters, with its U.S. same-store sales only growing by 0.8% in the second quarter, accompanied by a decline in restaurant traffic. In addition to Outback Steakhouse, Bloomin’ Brands also owns Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar.
Despite these challenges, Bloomin’ Brands’ shares have risen by 27% this year, giving the company a market value exceeding $2.2 billion. The specific changes that Starboard Value plans to advocate for at Bloomin’ Brands remain uncertain. Previous activist investors, including Jana Partners and Barington Capital Group, have attempted to pressure the company into cost-cutting measures and spinning off some of its brands.
Starboard Value has a track record of successful turnarounds in the restaurant industry. In 2014, the firm gained control of Darden Restaurants’ board and implemented various changes that led to increased sales and stock performance, including improvements to Olive Garden’s breadsticks.
Most recently, Starboard Value reached a deal with Papa John’s in 2019 to resolve a feud with the pizza chain’s disgraced founder, John Schnatter, and revive declining sales caused by his scandals. Earlier this year, Starboard CEO Jeff Smith stepped down as chairman from Papa John’s board, and the company repurchased the majority of the investment firm’s shares.
With Starboard Value’s involvement, Bloomin’ Brands may undergo significant changes as the activist investor aims to utilize its expertise in the restaurant industry to drive growth and enhance performance.
I wonder what changes the activist investor is planning for Bloomin’ Brands. This could potentially shake things up in the restaurant industry.