Investors devoured shares in Darden Restaurants on Tuesday after the owner of Olive Gardens and other casual dining chains announced plans to spin off some of its properties into a real estate investment trust.
Shares in the company rose as much as 5.8 per cent to a record high of $ 73.40, before easing to $ 70.15 at midday, up 1 per cent. The gain takes the stock's advance for the year to more than 20 per cent and marks the latest chapter in the group's transformation.
The company has struggled in recent years as consumers have increasingly favoured fast-casual chains like Chipotle and Shake Shack rather than its more expensive full service dining offerings. The group sold off its Red Lobster chain last year amid sluggish sales and saw its entire board replaced following a proxy fight with activist investor Starboard Value.
One of Starboard's demands had been for Darden to make better use of its property holdings. Under the plan being pursued, Darden will transfer 430 of its restaurant properties into a reit and lease back the majority of them. Proceeds from the deal will be used to pay down about $ 1bn of debt, the company added.
Sonic Corp, the drive-in burger chain, tumbled more than 11 per cent to $ 30.33 after saying it would open fewer restaurants than expected this year. The company's shares have risen some 50 per cent over the past 12 months, and management said it will open 22 to 27 new franchised restaurants in the current fiscal fourth quarter. That leaves Sonic with a maximum of 47 restaurants for its fiscal year and short of its goal for 50 to 60 new openings.
Green Dot, a provider of reloadable prepaid debit cards, enjoyed its biggest one-day gain on record after it signed a new five-year agreement with Walmart and announced plans to return $ 150m to shareholders via a new share repurchase program. The stock, down by a fifth over the past year before the news, surged 34 per cent to $ 20.52.
Improved software sales failed to buoy BlackBerry, with investors focusing instead on the smartphone maker's revenue and profit miss. Shares in BlackBerry fell 3.1 per cent to $ 8.91, taking the stock's losses for the year to 19 per cent.
Beauty group Coty fell by as much as 2.5 per cent after its incoming chief executive, Elio Leoni Sceti, reconsidered and decided not to take up the job. However, the stock later reversed the losses to trade 0.2 per cent higher at $ 31.51.
Fitbit continued its winning streak, climbing 3.1 per cent to $ 38.20. The maker of wearable fitness tracking devices has risen in every trading session since making its market debut last Thursday.
AT&T gained 3 per cent to a seven-month high of $ 36.07 following upgrades from both UBS and Barclays. Analysts at the two banks said the second-largest US wireless carrier should benefit from the cost savings from its proposed $ 48.5bn acquisition of DirecTV.
Elsewhere, the broad US equity market struggled for direction following Monday's rally. The S&P 500 eased 0.1 per cent at 2,210.85. The Dow Jones Industrial Average was largely unchanged at 18,115.74 and the technology heavy Nasdaq Composite retreated from Monday's record high to trade 0.2 per cent lower at 5,144.80
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