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Red Lobster Sale Could Benefit Private Equity

Darden Restaurants, the brand group that controls U.S. seafood chain Red Lobster, says it could either spin off the brand or sell it outright, possibly to a private equity firm. If Darden goes the private equity route it could close under-performing stores and boost prices to compete with upscale seafood brands like Bonefish Grill, but neither strategy is popular on public markets. Red Lobster competitor Captain D's underwent a similar transformation when it was bought by Sun Capital Partners in 2011 and under-performing stores were closed.