Whitbread shares jump as United States hedge fund becomes the largest shareholder

Marco Green
April 16, 2018

A unit of USA activist hedge fund Elliott Management how holds a six-percent stake in Whitbread (LON:WTB), Reuters has reported.

'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.

Months of research into the pensions and tax implications of such a...

The disclosure came almost three months after Reuters reported that another activist investor, Sachem Head, wanted Whitbread's management to examine a breakup as a way to boost the value of its individual businesses.

The Sachem Head hedge fund holds a 3.38 percent stake in Whitbread, according to Thomson Reuters Eikon data. The group's shares have lost almost six percent of their value over the past year, as compared with about a one-percent dip in the Footsie.

"Premier Inn and Costa Coffee are uneasy bed-fellows as there are no material synergies between the businesses and the uncharitable view is that it is not always apparent what value the PLC adds to its constituents", commented analysts at Canaccord Genuity this morning.

"He told the Today programme: "[Elliott] don't necessarily want the properties to be sold the way that more aggressive activists do, they just want two separate companies so they can value hotels alongside, say Hilton, and Costa alongside say the likes of Greggs and they think that will create shareholder value".

City analysts have also been piling the pressure on Whitbread to take a decision on Costa in recent months.

Other reports by Click Lancashire

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