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LongHorn Steakhouse Parent Darden Restaurants Announces Public Offering of 7.8 Million Shares

By Rhian Hunt - Apr 21, 2020 at 11:53AM

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The company is also offering around 1.2 million shares to the underwriters.

Darden Restaurants (DRI 1.29%), 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.

A businessman checking stock exchange graphs on his tablet.

Image source: Getty Images.

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.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Darden Restaurants, Inc. Stock Quote
Darden Restaurants, Inc.
$131.91 (1.29%) $1.68
Bank of America Corporation Stock Quote
Bank of America Corporation
$36.30 (1.09%) $0.39
The Goldman Sachs Group, Inc. Stock Quote
The Goldman Sachs Group, Inc.
$353.82 (0.61%) $2.14

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