Whitbread shares are soaring as a Costa spin-off looks more likely

Cornelia Mascio
Aprile 16, 2018

'In a nutshell, there is a widely-held belief that Whitbread should separate its Costa Coffee business from the Premier Hotels operation, ' explains Russ Mould, investment director at investment platform AJ Bell.

Reuters reported over the weekend that Elliott Advisors how held over six percent in Whitbread, with the move turning the hedge fund into the blue-chip company's biggest shareholder.

A spokeswoman for Whitbread has declined to comment.

Whitbread confirmed that USA activist hedge fund Elliott Capital Advisors now owns a 5.3% interest in the company's shares after transactions last week.

Elliott Advisors is the second activist investor to build a substantial shareholding in Whitbread, which also owns Beefeater and Brewers Fayre brands as well as restaurants Thyme, Bar + Block and Table Table.

Whitbread's chief executive Alison Brittain had fuelled speculation that Costa could be spun off by saying earlier this year: "We remain entirely open-minded about the structure of the business and are fully committed to reviewing it on a regular basis at the board level".

Unlike Sachem Head, however, Elliott does not want Premier Inn to sell its properties.

Whitbread https://www.whitbread.co.uk/investors shares rose 6.5 percent by 1030 GMT on Monday after Elliott disclosed the stake.

Recently, it backed Melrose's £8.1bn hostile takeover of engineering group GKN.

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