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Is Breaking Up Darden the Right Move for Investors?

Shares of Darden Restaurants  (NYSE: DRI  ) were up yesterday on the news that hedge fund Barington Capital Group took a 2.8% stake in the company and would push it toward breaking up.  Motley Fool analyst Taylor Muckerman isn't surprised by a hedge fund taking an interest in Darden, considering it's such a diversified company. But it may be the company's diversification that brings about a breakup; the company is composed of several quickly growing restaurant franchises, as well as some more established businesses, and Taylor wouldn't be surprised to see the company separate those two parts. According to Taylor, investors may want to buy shares now to avoid having to pay for two separate, solid companies after the breakup.

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9/26/2016 10:22 AM
DRI $62.93 Down -0.12 -0.19%
Darden Restaurants CAPS Rating: ***