Darden Restaurants splits company in two

Darden Restaurants plans to separate part of the company into an independent, publicly traded real estate investment trust, the company said Tuesday.

Darden, which owns Olive Garden and LongHorn Steakhouse, among other other restaurants, will spin off about 430 of its more than 1,500 restaurants into the REIT. The plan is to lease most all of them back to Darden. The company expects the deal to be complete by the end of the year.

The REIT is expected to give the company the opportunity to acquire more real estate, Darden said in a statement.

"We appreciate the valuation differential between restaurant and real estate companies and are excited to create a new company, which we believe will unlock current value while growing through acquisitions of other properties," Darden CEO Gene Lee said.

Darden has also listed about 75 properties for individual sale leasebacks. Proceeds from the real estate sales are expected to let Darden retire about $1 billion in debt.

The announcement comes the same day Darden reported fourth-quarter earnings of $105.3 million, or 82 cents a share. Adjusted earnings per share were $1.08. Sales jumped 13.8% to $1.88 billion, with positive same-store sales jumps at all of the company's brands. At Olive Garden, Darden's largest chain, same-store sales increased 3.4%.