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Starboard Value's other catalyst at Darden Restaurants

Starboard Value's largest equity holding remains Darden Restaurants. Jeff Smith did mention Darden at the SALT Conference [notes here], but briefly. Things have been somewhat quiet, in terms of value creation - granted there's been plenty said on Olive Garden's new breadstick sandwiches and Jeff Smith making the board of directors wait tables. 

But could there be a real estate spinoff in Darden's future? h/t @jonathanmaze

A decision on that analysis could come soon, and KeyBanc Capital markets Analyst Chris O’Cull believes that a real estate spinoff could improve shareholder value at the Orlando-based company by $5 to $7 a share — without putting pressure on restaurant operations.

Darden owns a lot of real estate. The owner of Olive Garden, LongHorn Steakhouse, Yard House, Bahama Breeze, Capital Grille, Seasons 52 and Eddie V’s owns more than 1,200 pieces of property. Starboard has estimated them to be worth $2.5 billion to $3 billion, and that spinning off that real estate would create $1 billion in shareholder value.

The likeliest scenario is that Darden will spin the real estate off into a real estate investment trust, or a REIT. Darden would take all of its real estate, put it into a separate company, and then spin it off to shareholders. That separate company would lease that property back to Darden.