Darden Restaurants (DRI 1.10%), the parent company of Olive Garden and LongHorn Steakhouse, said today it is making a public offering of common stock, amounting to 7,826,087 shares. The firms running the offering are Goldman Sachs and BofA Securities, a division of Bank of America. The restaurant company says it has the profits from the offering earmarked for "general corporate purposes."
The offering comes as Darden reports a 44% drop in same-restaurant sales for its fiscal fourth quarter as the coronavirus pandemic ravages the entire restaurant sector. Though it also noted the losses were somewhat offset by hefty growth in to-go orders, Darden isn't immune to the severe downturn experienced by most of the industry.
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Darden has taken several measures to help ensure its liquidity during recent weeks, with today's stock offering being only the latest. It drew down a loan worth $270 million at the start of the month, in addition to suspending its quarterly cash dividend to conserve resources.
Darden says it is offering the 7.8 million shares at $58.50 per share, several dollars below its current price of around $62 per share. The offering could potentially gain it up to roughly $450 million. Additionally, it is giving the underwriters an option to purchase 1.17 million more shares at the same price, an additional approximate $68.6 million boost to Darden's available cash.
Though it was down slightly before stock markets opened this morning, Darden Restaurants stock is now trading up about 1.1%, though it's still far below its pre-coronavirus value in the $100 to $120 range.
