Darden Restaurants, Inc. (NYSE:DRI) ended the last trading session with another loss of 1.46% but the price action provided enough signs for the bulls to hope for something in the short term at least. The volume of the day at 1.7 million was almost identical with the daily average of 1.8 million, offering no particular clue about the next probable direction. On the other hand, the price is testing a major support confluence zone around $62 levels. The price is hitting the lower boundary of the intermediate downtrend channel, coinciding with the previous swing lows. A short term bounce will not be surprising.
Darden Restaurants, Inc. (NYSE:DRI) has made public its intentions to spin-off its real-estate segment of the business to a separate company under the name of Four Corners Property Trust Inc. However, the plan to actually go through with it is yet to be finalized.
Reports from Darden Restaurants suggest that the company has begun its filings with the SEC. This also included a letter from the CEO of DRI, Eugene Lee, which indicated that the company would be publicly traded, independent and self-administered. The ticker for the new company has been suggested as FCPT. Additionally, DRI will not hold any interests in the company, once it has been separated.
However, the letter did not provide any time-frame about when the company would be spun-off, since the decision is yet to be approved by the board. One can assume that it would be a long time before the act comes into effect, keeping in mind that the rumors have been circulating around since June.
Once incepted, Four Corners would own a total of 424 properties of DRI’s restaurant business. These are currently spread over a total of 44-states. It is important to note here that 418 of these properties would either be leased to DRI and/or its subsidiaries. The lease would be valid for the next 15-years. As for the remaining 6 properties, they would be leased to two other holdings and their subsidiaries.
It is also expected that the shareholders of DRI would be awarded 1-share of common stock, for every 3-DRI shares. Mr. Lee pointed out in the official letter that Four Corners would provide excellent share value to its investors. Furthermore, Mr. Lee expects the company to be well positioned in order to acquire other real-estate companies as well.
Darden Restaurants, Inc. (NYSE:DRI) traded a total volume of 1.83 million shares during the October 20 session, to register a decline of 3% to its share value and close at a share price of $63.73.
