Darden said to be close to sale of Smokey Bones

ORLANDO Fla. The sale of the 73-unit Smokey Bones chain could be imminent as bids were due to parent company Darden Restaurants Inc. on Oct. 10 and expire after two weeks, according to a source close to the process who requested anonymity.

Joe Chabus, a spokesman for Smokey Bones, said that he could not comment on the auction process, but confirmed that there were a number of “quality bids” on the table and that Darden is examining them.

In May, Darden closed 54 units of the struggling, eight-year-old Smokey Bones chain and announced that it was putting up for sale the remaining 73, most of which are located in the eastern United States.

At the time, Darden, which also operates the Red Lobster, Olive Garden, Bahama Breeze and Seasons 52 casual-dining concepts, said Smokey Bones’ performance had lagged behind its other brands and that it would take a fourth-quarter, pre-tax charge of about $260 million for the closures and sale.

“We have concluded that it is not a meaningful growth vehicle for Darden,” Clarence Otis, Darden’s chairman and chief executive, said last spring.

This is not the first time Darden has pulled the plug on a fledgling chain. In 1995, the company shuttered its 51-unit China Coast chain because of disappointing performance.

Otis also said in May that Darden would continue to grow its other brands and shop around for growth vehicles. In August, Darden announced it had agreed to purchase Atlanta-based Rare Hospitality Inc., parent of the LongHorn Steakhouse and Capital Grille chains, for $1.4 billion.

Darden this month completed its tender offer for Rare, paying $38.15 per share in cash. Darden said that more than 90 percent of Rare’s outstanding shares were tendered in the offer and that the remaining shares would be acquired at the same per-share price through a short-form merger.

Rare currently operates 283 casual LongHorn Steakhouse restaurants and is franchisor of four others, all in Puerto Rico. The company also operates 29 upscale Capital Grille restaurants. Rare has annual sales of around $1 billion.

Orlando-based Darden operates 1,397 casual-dining restaurants, including 680 Red Lobster units, 614 Olive Garden outlets, 23 Bahama Breeze outlets and seven Seasons 52 units. The company generates systemwide sales of more than $5.6 billion.