Whitbread shareholder Elliott Advisors pushes for hotel disposals - report
Whitbread [LON:WTB], shareholder Elliott Advisors wants the FTSE-100 leisure company to sell hotel property assets, The Sunday Telegraph reported. The newspaper cited City sources who said Elliott, an activist investment firm, wants Whitbread to dispose of 10%-15% of its hotels and to remain “openminded” about its other hotels.
Premier Inn, the UK’s biggest hotel chain, is Whitbread’s main business. The company owns the majority of its hotels, while many of its major rivals have sold properties to focus on an asset light business model, the article said. Selling properties while focusing on brands frees up cash to invest elsewhere, the item added.
Elliott is understood to be growing frustrated by Whitbread’s strategy of owning hotel properties and believes that it is pushing Whitbread’s share price down, leaving the company vulnerable to a hostile bid, the item continued.
Whitbread’s hotel properties are worth GBP 5.8bn (EUR 6.81bn), according to the newspaper.
Those close to Elliott say it and several other investors would like to see Premier Inn manage hotels other than its own, the report said.
Whitbread’s Chief Executive Alison Brittain last week reiterated that the company’s strategy is to own properties and that ownership will protect against the volatility of the economic cycle, the article noted.
It is thought that Elliott also wants Whitbread to add hotel industry expertise to its board, the item continued. The report cited sources close to Whitbread who said it is looking to appoint directors with European hotel management experience.
Premier Inn sold its Costa Coffee business to The Coca-Cola Company [NYSE:KO] for GBP 3.9bn last year after pressure from Elliott and another activist investor, Sachem Head for a spin-off of Costa.
Whitbread’s market capitalisation stood at GBP 7.96bn at the close of trading in London on Friday, 3 May.