Talk of splitting out the Costa and Premier Inn businesses is not new for Whitbread (WTB). But news that Elliott Advisors had brought its stake in the company up to 6 per cent reignited this discussion. It’s been reported that the activist investor group has approached Whitbread's management with a plan to split Costa from Premier Inn through a demerger, suggesting that around £3bn of value could be created.
Last year when approached with this question, chief executive Alison Brittain said that she would be open to offers for Costa, but that the timing was not right since the company is in the midst of a three-year turnaround plan. Analysts at Numis said it was “entirely logical” that the two businesses should be split at some point, and that a demerger would be the easiest way to do so. Investment group Sachem Head has a 3.5 per cent stake, and so close to 10 per cent of Whitbread is now held by activist investors.
