Starboard Value, an activist investor known for its successful turnarounds in the restaurant industry, has announced its stake in Bloomin’ Brands, the parent company of renowned restaurant chain Outback Steakhouse. The news has sent Bloomin’ Brands’ shares soaring by 8.7% as investors anticipate positive changes.
Starboard believes that Bloomin’ Brands is currently undervalued, with a market value of $2.43 billion. The activist investor aims to leverage its expertise and experience to help the company unlock its full potential and boost its market value.
Bloomin’ Brands has faced challenges recently, with its sales growth slowing down. In the second quarter, the company’s U.S. same-store sales grew by a mere 0.8%. This decline has prompted investors like Starboard Value to step in and propose strategies to improve performance.
In addition to Outback Steakhouse, Bloomin’ Brands also owns other popular restaurant chains such as Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse and Wine Bar. Previous activist investors, including Jana Partners and Barington Capital Group, have urged Bloomin’ Brands to cut costs and consider spinning off some of its brands to enhance profitability.
Starboard Value’s involvement is seen as a positive development for Bloomin’ Brands as the investor has a track record of successfully turning around struggling restaurant chains. For instance, Starboard played a pivotal role in the turnaround of Darden Restaurants and Papa John’s, highlighting its ability to drive growth and create value in the sector.
As the news of Starboard Value’s stake in Bloomin’ Brands spreads, both investors and industry experts are eagerly awaiting the unveiling of the investor’s plans and strategies for the company. With its proven track record and expertise, Starboard Value’s involvement could potentially revitalize Bloomin’ Brands and generate value for shareholders.
Overall, this announcement signifies a potential turning point for Bloomin’ Brands, as it attracts the attention of a prominent activist investor with a history of successful turnarounds. The market’s positive response indicates growing confidence in the company’s ability to enhance its performance and create long-term value in the highly competitive restaurant industry.