Darden Restaurants (NYSE:DRI), 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.
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.